Deutsche Telekom’s (NYSE: DT) T-Mobile and Hutchison Whampoa’s 3 UK have agreed to combine their 3G access networks in the UK to extend their coverage and cut investment costs, the two announced today. They have created a 50-50 joint venture to manage the shared access network, which they say will save the two firms an estimated joint savings of £2 billion (US$4 billion) over 10 years. The deal allows the companies to offer high-speed mobile broadband services—such as mobile web surfing, video conferencing and music downloads—to 98 percent of the UK market.

Three had 4.1 million customers in the UK at the end of August, while T-Mobile, the country’s second largest operator, had 17 million customers at the end of September. It is T-Mobile’s third largest wireless market by subscribers after Germany and the US. When 3 launched four years ago, it pledged to bring the most cutting-edge content services to the market. It has struggled, however, to gain market share—in part because of poor coverage—and has had to offer cut-price voice deals to lure subscribers.

3 UK CEO Kevin Russell nixed the notion that the deal signalled 3’s future sale to T-Mobile. Russell told Bloomberg: ”There have been no merger talks, no acquisition talks between T-Mobile and 3 in the U.K. marketplace. I don’t foresee there will be going forward either.” The JV also makes it less likely that 3 will be snapped up by another operator. Hannes Wittig, London-based JPMorgan Chase analyst told Bloomberg: “The deal makes Hutchison more profitable as a consequence and thus delays market consolidation.”