Telecommunication company Telstra Corporation Ltd (ASX: TLS) is set to end its radio access network sharing deal with Vodafone Hutchison Australia in 2012 and hopes that the contract termination would pave the way for better long-term profits.

Telstra and Vodafone jointly announced on Thursday that the contract covering the usage of 2100Mhz mobile phone spectrum would not be renewed once its expires on August 31 2012 in light of a better technology now being utilised by the company.

The company said that any investments allocated on the joint venture would be a waste since its Next G network is already using a far superior technology that delivers better service, coverage and speed.

The decision, according to Telstra, would not impact its annual earnings before interest, tax, depreciation and amortisation (EBITDA) on 2010/11 and 2011/12 though an upward surge on the telecom giant's annual EBITDA from 2013/14 to 2016/17 would be noticeably lifted by more than $50 million.

Also, since the existing infrastructure would be integrated for continued use of Telstra's Next G network, no asset impairment should be expected once the joint venture reaches its end on 2012.

Likewise, Telstra customers currently serviced by the mobile spectrum should not feel the immediate effect of the deal termination though the company admitted that by 2012, Telstra clients would not be able to avail 3G services on their handsets.

The company also reminded that once the agreement with Vodafone has been effectively scrapped, Telstra customers accessing the internet through their mobile phones in the metropolitan area would experience considerable slow downs.

As of 1226 AEDT on Thursday, Telstra shares were trading up by one cent higher to $2.64.