Telefonica Germany (O2), the local unit of Spanish telecoms giant Telefonica, has signed a long-term agreement with Deutsche Telekom (DT) to use part of the German incumbent’s network to connect mobile phone base stations to its own backbone network, in a move that is expected to reduce the cost of carrying a growing volume of mobile data traffic. In a statement the two companies said that DT will connect around 2,000 locations where Telefonica’s voice and data traffic from various mobile phone masts is concentrated to the Spanish company’s backbone network via fibre-optic cables in the next few years. This will enable Telefonica Germany to boost the speed and capacity of its UMTS and Long Term Evolution (LTE) mobile networks, while avoiding costs related to the expansion of its own fixed line infrastructure. ‘The agreement with Telekom gives us the chance to operate cost-efficiently, quickly and flexibly in the rapidly growing market for mobile data,’ Telefonica Germany’s chief executive, Rene Schuster, said in the statement. Meanwhile, Niek Jan van Damme, DT board member responsible for German business, added: ‘To be able to exploit synergies in broadband expansion, network operators have to work together. And Telekom is willing to do that.’ The data of the UMTS and LTE stations at points of concentration distributed throughout Germany will gradually be transferred into DT’s network infrastructure and transported from there into the O2 core network, the statement added. No financial details of the contract have been released.