Orange and T-Mobile to form new supercompany

TMobOrangeT-Mobile and Orange have entered into talks about a possible merger of the two companies, which would see the creation of the UK’s largest network provider with a 37% share of the market. T-Mobile had recently been in talks with O2 and Vodafone in an attempt to rescue the depreciating company but now it looks likely that an agreement will be made with Orange today, and an official announcement on their decision will be issued later.

The two companies are still in discussion at the moment but if a deal is made it may cause problems with the Competition Commission, as the new super company will reduce the number of network providers from 5 to 4. Orange and T-Mobile are currently the 3rd and 4th largest networks in the UK respectively, coming behind Vodafone and the market leaders O2.

Orange and T-Mobile have said that their deal will substantially benefit UK customers by improving network coverage and signal quality. For the first 18 months after the deal is signed both brands will remain in operation while the new super company will undergo rebranding. Market analysts have been commenting that the rebranding will most likely involve scrapping one brand in favour of the other, and as Orange is the stronger brand name in the UK it is likely that it will be the T-Mobile brand that will end up in the bin.

Deutsche Telekom, the German parent company of T-Mobile, had been considering selling the struggling network operator for some time but was concerned that it would have to go for much less than its perceived worth, creating a massive loss for Deutsche Telekom. Deutsche Telekom has been discussing the merger with the French company France Telecom, owners of Orange, in an attempt to solidify their respective shares of the UK phone market, one of the toughest markets in Europe. An announcement will probably be issued later today on whether the two companies have reached an agreement on a merger or not.

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