T-Mobile and Orange merger will create Britain’s biggest mobile phone operator
If everything goes according to plan, the U.K. is about to get one less choice in mobile phone providers, but that may be the best thing for everyone.
It was announced today that Deutsche Telekom’s T-Mobile and Orange owner France Telecom are set to merge by this coming November. If the deal goes through, this would create the U.K.’s largest mobile carrier, outstripping O2 which currently holds 27 percent of the market, and would create a company with annual sales of 9.4 billion euros (£8.2 billion; $13.5 billion) according to the BBC.
The current plans call for the two entities to remain separate for the first 18 months following the finalized merger while branding opportunities are looked at. The perception is that eventually the Orange name would be the one to survive, but that is not official at this time. It is estimated that the merger will cost between £600 million and £800 million ($900 million – $1.48 bilion), but an eventual savings of £3.5 billion ($5.78 billion) could be realized by consolidating stores, staff, equipment and more.
Merging the two companies will immediately launch the new entity into first place in the U.K. market with 28.4 million customers. To insure that customers stay with the new firm, the two companies are already promising that consumers would see better coverage, investment in more 3G & data bandwidth and improved customer service.
Tom Alexander, chief executive of Orange, will head up the new company, while Richard Moat, T-Mobile’s UK boss, would serve as the chief operating officer.
The UK is seen as a highly competitive market with five major carriers and numerous smaller operations. This merger will stop T-Mobile from having to take considerable write downs that it had been facing as the fourth largest carrier in the market. The combined company will take the lead in the market with 37 percent of the customers, a full 10 percent ahead of O2.
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