The Great Debate UK
-Ceri Stanaway is the telecoms expert at consumer champion Which? The opinions expressed are her own.-
In a move that’s likely to shake up the UK’s mobile market, Orange UK and T-Mobile UK have announced plans to merge their two mobile companies to, in their words, “create a new mobile champion”.
The new joint venture will create the UK’s biggest mobile operator, outstripping the UK’s two current market leaders O2 and Vodafone, with a combined mobile customer base for Orange and T-Mobile of around 28.4 million mobile customers. This represents around 37 percent of UK mobile subscribers, based on December 2008 figures.
In the short-term, customers are unlikely to see any big changes. The companies expect to sign off the merger at the end of October, but they plan to maintain the T-Mobile UK and Orange UK brands separately for 18 months following completion of the transaction and use that time to decide the best branding options for the new venture.
Merging T-Mobile UK with Orange will bring 3.5 billion pounds of value to shareholders, and "substantial benefits to UK customers." Goodness, why on earth didn't they get together years ago? A merger that simultaneously enriches shareholders and customers is rare indeed, and one to be treasured - if this really is one of those seldom-seen beasts.
While the 3.5 billion pound figure is credible, the second claim, from Timotheus Hottges, the finance director of Deutsche Telecom, T-Mobile's parent, is harder to believe. The immediate reaction from other shares in the sector rather gave the game away, with retailer Carphone Warehouse down on the prospect of fewer suppliers, and Vodafone up on the hope of less competition in Britain's mobile phone market.