German telecom company, Deutsche Telekom AG and their counterpart French Telecom are going to form a joint venture with an eye on lowering the cost of purchasing of telecom and network equipment.
The companies announced in a joint statement that their collaboration will allow them to participate in combined procurement for their service contracts, equipment and other IT infrastructure, reducing overhead and giving them a stronger negotiating position. This move by the European telecom giants is projected to result in more than €1.3 billion in annual savings.
This collaboration has been undertaken at a crucial time when the industry is already under severe pressure from the customers to increase their speed and efficiency
Deutsche Telekom Chief Technology Officer Edward Kozel said in a statement: "Operators are expected to invest more than ever in networks and infrastructure as data usage increases exponentially and efforts to reduce the digital divide are being ramped up."
Experts are optimistic that the companies will be able to save as much money as they claim without damaging the quality of service they are able to offer to their customers.