(Bloomberg) -- Vodafone Group Plc and Telecom Italia SpA are in talks to jointly build a 5G network in Italy, sharing the cost and accelerating the rollout of the high-speed connections, people with knowledge of the situation said.

The two companies have signed a non-disclosure agreement about the potential collaboration with the aim of reaching a deal in the first quarter of 2019, the people said, asking not to be identified because the discussions are private. No final decisions have been made, they said.

The partnership could include sharing wireless towers and radio equipment and potentially granting each other access to the 4.8 billion euros ($5.4 billion) in 5G spectrum the two companies purchased in this year’s auction, they said.

Representatives for Telecom Italia and Vodafone declined to comment.

Telecom Italia rose 4.6 percent to 54 euro cents at 4:37 p.m. in Milan after earlier jumping as much as 6.4 percent, the biggest intraday gain since April. Vodafone rose 1 percent to 145.42 pence in London trading.

A deal between the two rivals that would hasten the rollout of next-generation mobile services would probably be welcomed by the Italian government, which is pushing for faster internet speeds and discouraging efforts to build duplicate networks. Telecom Italia is responding to political pressure by looking to collaborate with state-backed Open Fiber SpA to expedite the buildout of high-speed connections to homes and businesses.

A network-sharing partnership with Vodafone would also signal that Telecom Italia Chief Executive Officer Amos Genish is able to stay focused on advancing the company’s commercial interests, despite a shareholder battle that’s fueled speculation about whether he can hold onto his job.

5G’s Price

5G is already shaping up to be an expensive technology. To support the features it promises -- high-speed, low-latency connections for smart homes and cities, driverless cars as well as high-definition videos and games -- networks will have to be denser and able to handle the extra traffic. The Italian airwave sale took in $7.6 billion, more than twice what the government had expected.

Vodafone’s new Chief Executive Officer Nick Read, who succeeded Vittorio Colao in October, has signaled he’s open to doing tower deals as the carrier contends with the upcoming bill for 5G.

Read is under pressure from investors to balance the cost of acquisitions, including the 18.4 billion-euro deal for some of Liberty Global Plc’s European assets, with dividend commitments and spending on organic growth. It’s also attracted the interest of activist Elliott Management Corp., which took a stake in the carrier but hasn’t publicly outlined its intentions.

(Updates with share prices in fifth paragraph.)

--With assistance from Joe Mayes.

To contact the reporter on this story: Daniele Lepido in Milan at dlepido1@bloomberg.net

To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Amy Thomson

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