Orange and T-Mobile to merge

Tuesday, 08 September 2009 12:00

Orange and T-Mobile are to merge, creating Britain's biggest mobile phone company with sales of £7.7 billion.

Deutsche Telekom, which operates T-Mobile, and France Telecom, which owns Orange, plan to combine the companies to take 37 per cent of the UK market, taking over from O2 as the country's biggest provider.

According to the telecom firms, the merger will bring "substantial benefits" to its 28.4 million UK consumers.

Both Orange and T-Mobile customers will receive better network coverage and improved customer service, the companies claim.

Timotheus Höttges, chief financial officer 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."

The T-Mobile UK and Orange UK brands will be kept for 18 months after the deal closes, the companies confirmed.

After that, the merged group will consider "branding alternatives".

The future of T-Mobile has been up for discussion for a number of months - with the firm losing 87,000 customers in the second quarter - and the joint venture between the two firms is being seen as a way they can proceed with a deal, as it was feared a takeover may have been stymied by competition regulations.

Jason Glynn, communications expert at uSwitch.com, claimed the deal "completely changes the landscape of mobile phone industry in the UK".

"With a combined 37 per cent market share, this new major player will now have every opportunity to provide some really competitive deals and give the UK's lethargic mobile phone industry the wake-up call it needs," he said.

However, he added: "Generally speaking, having just three organisations dominating 90% of one sector is not always a positive move. However, the mobile phone sector is one of the few that will actually benefit from this."

Mr Glynn explained; "Overall we would advise consumers not to panic. The merger process is long and complex and reports state that if it does come to fruition, both brands will continue to operate separately for at least another 18 months."

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