Deutsche Telekom and France Telecom plan to merge T-Mobile UK and Orange UK
Posted on 8-Sep-2009 20:16
Filed under: News
Deutsche Telekom and France Telecom have entered into exclusive negotiations to combine T-Mobile UK and Orange UK in a new 50:50 joint venture company.
The new joint venture will create the UK’s leading mobile operator with a a combined mobile customer base of around 28.4 million, representing approximately 37 percent of UK mobile subscribers, based on figures at end December 2008.
By integrating Orange’s broadband activities, the joint venture will also have the capabilities to offer convergent solutions to its customers in the future. The business will have pro forma 2008 revenues of approximately €9.4 billion (£7.7 billion) and EBITDA of €2.1 billion (£1.7 billion).
The companies say this combination will result in expanded network coverage and enhanced indoor and outdoor network quality for 2G and 3G services, as well as better customer proximity through a larger network of own shops and improved customer services.
There was mention of "optimisation" of the workforce, notably in customer service, network and G&A operations.
The Board of the new joint venture company will have balanced representation from Deutsche Telekom and France Telecom. The management team would be led by Tom Alexander, currently CEO of Orange UK, as CEO and Richard Moat, currently CEO of T-Mobile UK, as COO. The governance of the joint venture would attribute extensive operational decision-making to the management team.
The T-Mobile UK and Orange UK brands will be maintained separately for 18 months after completion of the transaction. During that period management will review branding alternatives for the joint venture and will develop a new branding strategy recommendation for shareholder approval.
The signing of such agreement is expected by the end of October 2009.