MILAN, Italy: Italy's push to expand high-speed mobile connectivity gained momentum after two major telecom operators agreed to cooperate on building next-generation networks, a move aimed at cutting costs and extending coverage beyond major cities.

Telecom Italia (TIM) said it had reached a preliminary agreement with Fastweb, the Italian unit of Switzerland's Swisscom, to share parts of their mobile infrastructure and accelerate the rollout of 5G technology across the country.

Under the arrangement, each company will be able to use the other's mobile radio access network in selected areas. The cooperation is designed to reduce costs and avoid duplicating infrastructure while maintaining competition between the two operators.

TIM said the agreement would help bring advanced connectivity to parts of Italy that have so far lagged. "The efficiencies generated will make it possible to extend high-performance 5G network coverage to underserved low-density areas," the company said in a statement.

A person with knowledge of the matter previously told Reuters that the network-sharing deal could allow each company to save 250 million to 300 million euros (US$292 million to $351 million) over 10 years.

Sources said the project will focus on towns with fewer than 35,000 residents and will cover active network components, including antennas, base stations, radio units, backhaul, and related equipment. Rather than pooling assets, the two companies will each be responsible for roughly half of Italy's 20 regions, the sources added.

TIM said it expects to sign a final contract in the second quarter of this year. It stressed that the partnership would not blur competitive lines, adding that the collaboration "ensures that both companies will maintain full commercial autonomy and technological independence."

For now, TIM and Fastweb will not share assets or supplier contracts, according to people familiar with the discussions.

The agreement comes amid intense competition in Italy's telecoms sector. According to industry association Asstel, fierce price competition has eroded nearly a third of sector revenues since 2010 and pushed post-investment cash flow to zero from about 10.5 billion euros over the same period.

Fastweb has emerged as a more potent force in the market following its expansion last year. The company became Italy's largest mobile operator after completing an eight billion euro acquisition of Vodafone's local business.