Orange and T-Mobile have confirmed they are to merge to create the UK’s biggest mobile phone company. Orange, owned by France Telecom, and T-Mobile, owned by Germany’s Deutsche Telecom, have decided to merge in order to minimise potential conflict with the UK’s strict competition regulation bodies.
Previously the struggling T-Mobile, which has 12 million customers in the UK but has seen its market share slip over recent months despite popular advertising campaigns, had been in talks with other telecoms companies including Vodafone. Orange has around 17 million customers – 15.9 million active mobile customers and 1 million fixed broadband customers.
But what does the merger mean for customers? At the moment, it’s too early to tell. It is thought that if the deal gets the go ahead, which is by no means certain yet, the individual brands will remain, at least in the short term.
What is clear is that by sharing the same infrastructure (like T-Mobile already does with 3 for 3G) there should be economies of scale which should mean, cost savings. Whether these will be passed on to the customer is another matter, but in a statement Gervais Pellissier, chief financial officer 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, thereby creating a well positioned player.”
“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,” he added.
In particular, it is thought that the merger will give the enhanced network the necessary muscle to get the most popular handsets as O2 and Vodafone have been able to do with the iPhone and Blackberry Storm.