The deals like this, brings new hopes for the customers and areas where Mobile usage isn’t as dense as US, Japan, China.
Today, as per the latest press release, Orange and T-Mobile, will join hands in a new joint venture, this fall.
At the moment, they are 3rd and 4th largest Telecom providers in UK. The merger will create the largest mobile company in the United Kingdom, with a subscriber base of more than 28.4 million which builds up roughly 37% of the market.
Currently the largest UK operator with a 27% share is Telefonica’s O2, which is the exclusive iPhone carrier. At the second place with 25% of the British market is Vodafone, the company which jointly owns a 48% stake of Verizon Wireless.
The merger of Orange and T-Mobile in the UK would be like Sprint and T-Mobile merging in the United States, breaking up the market into thirds.
The deal, which is due to be signed November, comes on the heels of poor financial results from T-Mobile and lackluster sales from Orange, and the reasons behind it are quite obvious: saving money. Despite the huge initial cost of the merger, the two companies expect to save, over time, up to 5.7 billion dollars. Part of these savings will probably reflect on the combined staff of the two companies: Orange’s 12,500 and T-Mobile’s 6,500 employees, although a spokeswoman said that it’s too early to talk about the impact on the workforce, but we can expect cuts.
As far as branding goes, both brands will remain separate in the first 18 months after the deal is completed. Orange chief executive Tom Alexander will lead the new company, while T-Mobile’s UK boss Richard Moat will become the COO.
Though both Vodafone and O2 were recently reported to have made bids on T-Mobile, a mutual interest was shared between executives at Orange and T-Mobile. Orange’s CEO Tom Alexander, for example, came to the company in 2007 from T-Mobile-owned MVNO Virgin Mobile. Alexander will become the CEO of the joint Venture, and T-Mobile’s CEO Richard Moat will take over as COO.
For the first 18 months of the joint venture, both brands will remain separate. T-Mobile this morning said that period will be used to “review branding alternatives” for the new company.
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