Orange and T-Mobile agree merger to become UK market leader

Parent companies France Telecom and Deutsche Telekom have agreed a deal to create a 50:50 joint-venture, which they said will have 28.4m customers and, based on last year's figures, generate revenues of €9.4bn (£8.25bn).

The deal is expected to be finalised before the end of October, but both brands will remain separate for at least the first 18 months.

The companies said it will cost between £600m and £800m to integrate both businesses between 2010 and 2014.

The move would significantly boost T-Mobile's standing in the UK market, which currently occupies fourth place with a 15% share. Orange is third with 22%, behind Vodafone (25%) and O2 (27%).

The announcement comes just a day after it was reported that both O2 and Vodafone were in talks with T-Mobile, having offered approximately £4bn each for the company (nma 7 September 2009).

Timotheus Höttges, CFO of T-Mobile parent company Deutsche Telekom, said, "We will become the market leader. Our customers will benefit in many ways, such as from the best mobile broadband offer in Britain. In the second-biggest market in Europe, which is undoubtedly one of the toughest and most competitive, we're giving T-Mobile UK a clear and strong future."

Gervais Pellissier, CFO of Orange's owner 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 provide strong benefits for our customers through improved coverage and quality of service and an enhanced capacity to develop new services and technologies."

Published by: Will Cooper

Published 8th September, 2009

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