Andre Yoskowitz
8 Sep 2009 16:44
Deutsche Telekom AG and France Telecom SA have announced they intend to merge their UK mobile phone divisions, creating the largest mobile operator in the region.
The divisions, T-Mobile and Orange UK, will join as a 50/50 venture. Analysts believe the merger will benefit all UK mobile operators, which will no longer have to continously cut prices just to stay competitive.
"This is another sign that we may be moving into a period of sustained M&A activity as firms look to realize cost savings through consolidation," notes Mark Priest, a trader at ETX Capital in London, via the AP.
Combined, the companies would have 28.4 million subscribers, just over 35 percent of total UK mobile subscribers. The current leader is O2, at 27 percent market share, followed by Vodafone at 25 percent share.
Both companies did say however that some redundancies may have to be cut, leading to job losses.
The deal should be signed in October and finalized by January given it passes anti-trust statutes.