T-Mobile UK – mergers, acquisitions and a huge slice of the UK mobile pie

Broadband, Mobile phones

t-mobile-sign.jpgLet’s start this from the top. T-Mobile UK has had its name plastered all over the business pages of late.. Rumour is rife that they’re to sell out or merge in some way since a spokesman from the their parent company, Deutsche Telekom, expressed disappointment at the upcoming results in the UK market. Predications are of a writedown of 1.8bn euros and he said:

“The British market is highly competitive and has comparably low margins. In our view consolidation is a means to take excess capabilities out of the market. Nothing is unthinkable on our side.”

Now, on the one hand, this is fantastic non-committal business speak but at the same time it’s not the kind of talk you’d come out with if you weren’t planning on taking some kind of action. So exactly what is the plan? Well, they could reduce the investment in the UK branch of T-Mobile but then that’ll only cause an equally large loss of market share and profit. So, quite rightly, all the talk is of merger or takeover or somewhere in between. The question is, with or by whom?


The most obvious candidates are the struggling UK networks with 3 presumably top of the list. 3 seems to have the money, the ambition, the plan, the drive and, to put it bluntly, the bollocks to pick up T-Mobile with whom they already share a network. Now, if they took hold of T-Mobile’s huge customer base too, then that old problem of termination charges wouldn’t be quite the barrier it’s proved so long to be.


Orange has lost its way. From a consumer point of view, they’ve done nothing interesting since Orange Wednesdays and that fashionable network image they had in the 90s has all but vanished. All we’re left with is a few cinema adverts and bunch of expensive animal tariffs that no one understands or particularly wants to get involved with.

They don’t do a lot in the way of gutsy exclusive handsets deals and, although it’d be just the tonic to get them back on their feet, I can’t see them getting involved. Hard to tell whether it’s a question of not having the cash to play with or the lack of foresight but it’s high time Orange made a move of some sort.

Virgin Mobile

Surely this is the moment for the third wheel of the UK networks? There hasn’t been any room for a sixth operator and if Branson is serious about this foray into telephony then here’s an easy way to finally get a foothold, but does he, or various branches of his media empire, have the cash to back it up? I think not.

O2 & Vodafone

The two biggest kids in the park aren’t probably so much interested in what T-Mobile would offer them as what it would take away from the other players if they controlled it too.

Part of me feels that Vodafone is too aloof as an operator to get involved and it’s questionable whether O2 has the capital after the extensive market push in the last five years. They’d probably love a piece of T-Mobile. They’d pretty much have the top tariffs and many of the handsets in the country completely sewn up but, as I say, one wonders how much cash they’ve got left after sponsoring the Dome amongst other marketing spending.


Mobile broadband is a fantastically growth area at the moment and T-Mobile has been doing an excellent job of getting their 3G solutions out there in the shape of netbooks and dongles. It actually represents quite a shame that DT is looking to sell at all considering their UK department has such a progressive attitude to data, price plans, handsets, offers and advertising but thems the breaks, unfortunately.

So, with broadband such an important utility these days, then this might be the kind of space where a fixed line ISP might be able to extend their reach. Naturally, it’d be a tricky move into a very strange world, as far as handsets are concerned, but there have to be worries out there in the industry that 3, 4 or 5G technology might eventually present consumers with the option of ditching a separate home broadband solution. This would be a good time for an ISP to start future-proofing their business model.


The final option is that another player not from the mobile telephony world would jump into the game and with a sizeable slice of the pie too if they could stump up the estimated £3.2bn for T-Mobile. One suggestion is News Corps’s Sky who might be interested in offering the kind of TV, landline, broadband and mobile packages that Virgin Media does.

Another option is BT who, admittedly, has the tiniest of little fingers in the moble pie already but I’ve never met anyone who uses a BT Fusion handset. Have you?

BT must rue the day they flogged Cellnet which of course became O2. Perhaps this is their chance to get back in and you could certainly imagine them finding the money.


Whatever the outcome, I’d be surprised if this is the last we hear of Deutsche Telekom’s UK troubles. There’s already a few shareholders speaking their minds and it’s all gone eerily quite at all the other operators.

I suppose the big question for the consumer is what difference it will make for us and, of course, that’s all about who would buys T-Mobile out. Personally, I’d like to see 3 take up the mantle. They probably have the best understanding of the network through working with them at the moment and they might finally be able to deliver the value they offer customers on a much larger scale.

We wait to see.

Daniel Sung
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One thought on “T-Mobile UK – mergers, acquisitions and a huge slice of the UK mobile pie

  • t-mobiles mobile broadband is the best i have used, but who actually rates any mobile broadband service? Im not sure how this market will develop though with the push for greater broadband coverage and the availability of broadband wifi in most cafe chains, hotels and service stations I really have no need for a mobile dongle other than to use it at my parents house. Inbetween and for casual surfing my iPhone has taken over. If the service becomes a lot cheaper and download speeds improve then I can see it would be attractive as a no hassle solution – I may fire up the laptop more often.

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