Orange and T-Mobile to merge

8 Sep 2009

Orange and T-Mobile have announced they are to merge in a deal that will create a leader in the UK mobile market with a combined market share of 37pc and more than 28 million customers.

Orange, which is owned by France Telecom, and T-Mobile, which is owned by Deutsche Telekom, said this morning that they expect the deal to result in a new company with annual revenues of €9.4bn (£7.7bn). They companies also expect cost savings of €4bn to result from the deal.

France Telecom and Deutsche Telekom said that the deal would bring “substantial benefits” to UK consumers, such as expanded network coverage and enhanced indoor and outdoor network quality for 2G and 3G services; better customer proximity through a larger network of own shops and improved customer services; and increased investment in innovative new services.

The two companies also said that the new, enlarged business created by the merger will be able to compete more effectively with the other two large mobile operators in the market, O2 and Vodafone.

“In the second-biggest market in Europe, which is undoubtedly one of the toughest and most competitive, we are giving T-Mobile UK a clear and strong future. And, with our partnership, we have taken the most value enhancing strategy for Deutsche Telekom and its shareholders,” said Timotheus Höttges, CFO of Deutsche Telekom.

“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,” said Gervais Pellissier, CFO of France Telecom.

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