Tuesday, 8 September 2009

Orange and T-Mobile to Merge

As predicted on this very blog Orange and T-Mobile are to join forces to become the largest mobile telecoms company in the UK. The deal has been announced but has yet to be checked by the relevant regulatory bodies. The new company will start with 28.4 million customers and around 37 percent of the market. No details about branding have yet to be released but T-Mobile has been under performing lately and insiders have suggested that this deal has saved them from certain doom so I wouldn't be surprised in their brand name is let go.

This means that the Big Five mobile phone companies in the UK are now to become the Big Four with O2, 3 and Vodafone making up the numbers. Some have speculated that this could have a negative effect on consumers. Whilst the new Orange/T-Mobile hybrid will no doubt be able to offer increased coverage for mobile and mobile broadband it reduces the amount of competition in the UK market which could have an influence on prices.

Whilst the merger will cost the newly formed company it will also allow them to drastically reduce costs. Duplicate base stations and retail outlets will be closed and staff costs reduced. Most large towns have both an Orange and a T-Mobile shop and there will be no need for these to both remain open. Those who are already signed up with one of the companies are likely to see signal and coverage improvements.

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