T-Mobile owner Deutsche Telekom and Orange owner France
Telecom have confirmed they are to merge their UK
operations.
The merger will form the UK's largest mobile operator, ousting
Telefónica's O2 from the top spot, according to the
Wall
Street Journal.
The telcos said the merger and integration should generate
estimated cost savings of more than €4bn for the company, which
will have a 38% share of the UK market.
Although the savings enabled by the deal may be passed on to
end-users, analysts have said the consolidation will mean reduced
choice for users.
The T-Mobile and Orange brands will run separately for 18 months
after completion of the transaction while a review of alternative
brands is made, the companies said.
The board will be made up equally with representatives from the
two with Orange UK chief executive Tom Alexander as CEO and
T-Mobile UK CEO Richard Moat as chief operating officer.
O2 and Vodafone currently occupy the top two spots with 27.1%
and 23.6% market shares respectively, according to research firm
Gartner.
The deal will be reviewed by the UK Office of Fair Trade and
possibly the European Commission.