T-Mobile Merges With Orange To Create UK’s Largest Mobile Network

Amid rumours of amorous advances from Telefonica to the tune of £3.5bn, Deutsche Telekom’s UK arm has announced an agreement to merge with France Telecom’s British offshoot – namely a strategic alliance of T-Mobile and Orange.

Rather than being absorbed, the 50:50 joint venture will see Orange’s 22% stake in the UK market join with the 15% that T-Mobile has acquired to result in the UK’s largest mobile network, the combined 37% eclipsing the 27% held by Vodafone and dwarfing O2‘s 25% share.

T-Mobile has long been in fourth place amongst the UK carriers, offering competitive tariffs whilst exclusive handsets that appealed to the masses at large remained thin on the ground.

Orange and T-Mobile talk of both ‘efficiencies’ in methods of practice, as well as ‘benefits to UK consumers,’ suggesting a streamlining of operational staff where there is overlap between the two firms.

Don’t expect to see a T-Orange shop on your high street any time soon, the two brands will be maintained separately for 18 months after completion, with integration a slow and measured process to the tune of between £600 and £800 million.

This move could well be a double-edged sword for consumers – the good news is that a better service, improved 3G phone reception and more competitive bids on exclusive handsets are likely to be on the cards, a consequence of cost saving exercises and sharing of mobile masts.

The bad? Well, with one network leveraging almost 40% of the market and less networks competing as a whole, mobile phone deals may not be as great for us in the long run…and where does this leave brave minnows like 3?

The CEOs of the respective companies are nothing less than upbeat surrounding the merger in the following video.

Source: Orange Press Release