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Orange And T Mobile To Create UKs Largest Mobile Phone Network

Wed, 09 Sep 2009

Mobile phone giants Orange and T Mobile have agreed to join their UK operations and create the largest mobile phone company in Britain.

The new mobile operator will have a combined customer base of around 28.4 million, giving it a 37 per cent share of the UK market and relegating current market leaders O2 and Vodafone to second and third place.

France Telecom’s Orange and Deutsche Telekom -owned T-Mobile, currently the UK's third and fourth largest operators, said the 50/50 joint venture would "bring substantial benefits to UK customers", including expanded network coverage, better network quality and improved customer services

The companies also revealed that the merger will cost between £400 million and £600 million, but will result in annual sales of £7.7 billion and earnings of £1.7 billion, based on pro forma 2008 figures, as well as annual savings of around half a billion pounds by 2014.

However, a spokeswoman for Orange warned that such savings would involve job cuts across both businesses, including networks and IT, marketing and advertising, and retail.

Commenting on the deal, Timotheus Höttges, chief financial officer of Deutsche Telekom, said: "We will become the market leader - our customers will benefit in many ways, for example 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 are giving T-Mobile UK a clear and strong future."

France Telecom's chief financial officer Gervais Pellissier added: "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."

According to the BBC, the new joint venture will come into effect in November, although both brands will continue running independently for 18 months while being integrated.
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