With a workforce of around 6,500 and 12,500 employees respectively, the two mobile giants of UK, viz T-Mobile and Orange are to merge with 28.4 million customers and a 37% market share. The deal is expected to be completed by this November that will create a business with sales of 9.4bn Euros.
Deutsche owned T-Mobile and France Telecom owned Orange are one of the largest mobile operators in Europe whose deal is the second large corporate deal in the last two days, just after the US Company Kraft Foods made a £10.2bn takeover approach to confectionery group Cadbury.
Bringing substantial benefits to UK customers, the two parties promised to deliver expanded network coverage, better network quality and improved customer services.
"By combining our operations in the UK, we anticipate the long-awaited consolidation in one of Europe's most competitive markets, thereby creating a well positioned player," said Gervais Pellissier, chief financial officer of France Telecom. The enlarged new company is expected to be in a better position to invest in new services, to exploit new technologies and compete more effectively.
Initially for a period of around 18 months, both brands will remain separate to review the branding that will have the operating officials -Tom Alexander, Orange’s chief executive to lead the new company with T-Mobile's UK boss Richard Moat as chief operating officer.
Details about any impact on the staff isn’t made available yet where the integration between the two parties will cost between £600m and £800m.
For quite some time T-Mobile has been fighting for its existence in the market to compete against its larger rivals. Last month only it admitted that it had lost around 87,000 UK customers in the three months to the end of June. Though it is one of the world's largest mobile operators with more than 148 million customers, it has only 12 million in the UK. On the other hand Orange has almost 17 million customers in the UK.