France Telecom and Deutsche Telekom will share parts of their mobile networks in Poland, Austria, and Romania, saving perhaps 650 million euros in operating and investment costs a year, sources said.
The two are holding a joint press conference in London on Monday morning to provide fresh details on a plan announced in February to undertake technology cooperation in various areas.
Two sources briefed on the companies' cooperation project, dubbed 'Project Victory' internally, said it would also include joint purchasing of network equipment and handsets.
No numbers were disclosed on potential cost savings from such joint purchasing, they said.
Sharing some parts of mobile networks in Poland, Austria, and Romania could trim 200 million euro of operating costs and 450 million euro of capital expenditure a year through 2015, the sources said.
France Telecom declined to comment on Friday, and Deutsche Telekom could not immediately be reached for comment.
In February, the companies identified five areas of cooperation, including radio access network sharing in Europe, giving customers wireless internet on each others' networks while roaming, and equipment standardization.
They also said they would explore working together in new technology areas such as connected cars, home servers, and e-health initiatives.
In late 2009, France Telecom and Deutsche Telekom formed a joint venture mobile operator in Britain known as Everything Everywhere. Their cooperation elsewhere in Europe is in a much earlier stage and to date has not involved creating new companies or share swaps.
The co-operation comes at a time when European telecom operators, faced with sluggish growth and tough price competition, are searching for ways to cut costs to improve profitability.
For its part, France Telecom is also undertaking a review of its portfolio of businesses outside its home market, which could lead to disposals or acquisitions, banking sources recently told Reuters.
Shares of France Telecom closed largely flat on Friday at 15.65 euros per share, while Deutsche Telekom was up 1.6 percent at 11.26 euros per share.
(Reporting by Leila Abboud and Marie Mawad; Editing by Will Waterman)