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Orange/T-Mobile merger plan announced

8th Sep 2009
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UK arms of Deutsche Telekom and France Telecom plan a joint venture; deal creates Britain’s largest mobile operator. Jon Wilcox reports.

The parent companies of Orange UK and T-Mobile UK have announced plans to merge the two operations, creating the largest mobile phone operator in the country.  The joint venture, which will handle 37% of the UK’s mobile subscribers, is expected to record turnover in excess of £7.7bn.

Under the merger plans put forward by Deutsche Telekom and France Telecom (owners of T-Mobile UK and Orange UK respectively), both brands will continue for 18 months after the transaction is completed.  The deal with Orange comes after weeks of speculation over T-Mobile UK's future, with both Vodafone and Telefonica (the parent company of O2) said to be in talks with the operator.

Several customer benefits have been raised by the two companies, including enhanced network quality for both 2G and 3G services, improved customer service, and an enhanced position for technology and service innovation.

Gervais Pellissier, CFO of France Telecom said: “By combining our operations in the UK, we anticipate the long-awaited consolidation in one of Europe’s most competitive markets.”

“This will reinforce fair competition and will provide strong benefits for our customers through improved coverage, quality of service and an enhanced capacity to develop new services and technologies.”

Timotheus Höttges, CFO of Deutsche Telekom, said: “We will become market leader - our customers will benefit in many ways, for example from the best mobile broadband offer in Britain.”

Despite the potential benefits for customers, a grey cloud is already gathering over Orange UK and T-Mobile UK’s workforces.  Cost savings noted in today’s statement includes the “rationalisation of the network of retail stores and the streamlining of operations”, together with the optimisation of employees working in “customer service, network and G&A operations.”



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