T-Mobile and Orange Combine To Make New UK Mobile Leader

Mobility

Joint venture between French and German incumbents gives T-Mobile/Orange the lead in UK mobile market

T-Mobile and Orange are merging, to create the UK’s largest mobile operator – in a deal apparently designed to head off regulatory objections.

German incumbent Deutsche Telekom has announced it will create a 50-50 joint venture, combining its own UK mobile arm, T-Mobile, and that of the French giant France Telecom.

The deal will get tough scrutiny from the UK telecom regulator, Ofcom, which believes strongly that the country needs several operators to maintain competition. However, the joint venture is apparently designed to appease the regulator: “It will be more favourable to Ofcom than a simple takeover,” said telecoms analyst Eddie Murphy of Priory Consulting Services, on the BBC’s Today programme.

For the same reason, the two brands will continue, but share infrastructure and account management functions.

The eventual deal follows months of speculation, since Deutsche Telekom put the unit up for sale in May . Vodafone reportedly considered a £3bn bid for T-Mobile UK in June, and so did O2

Mobile operators in the UK already collaborate on infrastructure – for instance T-Mobile already shares 3G infrastructure with 3, but they have been arguing over spectrum for mobile broadband, to the extent that the government has “banged their heads together”.

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