This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/8243226.stm
The article has changed 22 times. There is an RSS feed of changes available.
| Version 5 | Version 6 |
|---|---|
| T-Mobile and Orange in UK merger | |
| (about 1 hour later) | |
| T-Mobile and Orange are to merge their UK businesses, creating a mobile phone giant with 28.4 million customers. | |
| The deal between Orange-owner France Telecom and Deutsche Telekom's T-Mobile UK will see a business with sales of 9.4bn euros (£8.2bn; $13.5bn). | |
| Holding about 37% of the mobile market it will be the UK's largest provider, overtaking Telefonica's O2. | |
| It is the second large corporate deal in two days, after Kraft Food's £10.2bn takeover proposal for Cadbury. | It is the second large corporate deal in two days, after Kraft Food's £10.2bn takeover proposal for Cadbury. |
| Orange and T-Mobile said their deal - due to be signed by November - would "bring substantial benefits to UK customers", and promised expanded network coverage, better network quality and improved customer services. | Orange and T-Mobile said their deal - due to be signed by November - would "bring substantial benefits to UK customers", and promised expanded network coverage, better network quality and improved customer services. |
| However it is likely that competition authorities in the UK and EU will probe the deal. | |
| 'Efficiencies' | |
| Both brands will remain separate for the first 18 months after the deal is completed while branding is reviewed. | Both brands will remain separate for the first 18 months after the deal is completed while branding is reviewed. |
| There will be more of these mergers within particular industries in the coming weeks and months... because big businesses have a sheep-like quality Robery PestonBBC Business Editor Read Robert's thoughts Return of the deal? | |
| Orange chief executive Tom Alexander will lead the new company, with T-Mobile's UK boss Richard Moat as chief operating officer. | Orange chief executive Tom Alexander will lead the new company, with T-Mobile's UK boss Richard Moat as chief operating officer. |
| Orange employs 12,500 people in the UK, while T-Mobile has UK workforce of 6,500. | Orange employs 12,500 people in the UK, while T-Mobile has UK workforce of 6,500. |
| A spokeswoman confirmed there would be "efficiencies" that could be made across both businesses - but said it was too early to give details of any impact on staff. | A spokeswoman confirmed there would be "efficiencies" that could be made across both businesses - but said it was too early to give details of any impact on staff. |
| Integrating the business will cost between £600m and £800m, the firms said. This bill would include decommissioning mobile phone masts, cutting back the network of stores and streamlining other operations. Over time, savings should reach about £3.5bn, they added. | |
| Mobile phone analyst Nigel Hawkins told the BBC that it was not unprecedented for a firm to have move than a third of a European country's mobile phone market. | |
| DEAL IN NUMBERS 28.4m customers37% UK market share£8.2bn sales (in 2008) Source: Deutsche Telekom | |
| "Over the next few weeks and months there will inevitably be some negotiation with regulators, and we could see some concessions from the operators," he added. | |
| "If the deal goes ahead, then this merged firm, along with O2 and Vodafone will have more than 90% of the UK market and there will be concern that there remains plenty of competition and that this position is not abused." | |
| Avoiding writedowns | Avoiding writedowns |
| Deutsche Telekom said earlier this year that it was considering its options for its UK business - which has struggled to win customers in the highly competitive market - which sees five operators and several smaller players compete. | Deutsche Telekom said earlier this year that it was considering its options for its UK business - which has struggled to win customers in the highly competitive market - which sees five operators and several smaller players compete. |
| Observers say that a joint venture allows the German firm to avoid the write downs it could face if forced to sell T-Mobile UK for less than it hoped. | Observers say that a joint venture allows the German firm to avoid the write downs it could face if forced to sell T-Mobile UK for less than it hoped. |
| Meanwhile, for France Telecom, the deal it is a way to strengthen its position in the UK market without paying cash or taking on vastly more debt. | Meanwhile, for France Telecom, the deal it is a way to strengthen its position in the UK market without paying cash or taking on vastly more debt. |
| T-Mobile is currently the fourth-largest mobile operator in the UK, with a 15% share of the market. O2 has a 27% share, followed by Vodafone (25%) and Orange (22%). | T-Mobile is currently the fourth-largest mobile operator in the UK, with a 15% share of the market. O2 has a 27% share, followed by Vodafone (25%) and Orange (22%). |