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T-Mobile and Orange merger creates largest mobile phone provider

10 September 2009 / by Andy Davies

T-Mobile and Orange have announced they are to merge in a joint venture which looks set to create the largest mobile phone company in the UK.

The move will mean the mobile phone company will have a combined customer base of more than 28million people, which represents around 37 per cent of UK mobile phone market.

It is hoped that the move will bring expanded network coverage to customers and improved indoor and outdoor network quality for 2G and 3G services.

Commenting on the merger, Gervais Pellissier, CFO of France Telecom, which owns Orange, said: "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."

uSwitch.com believes that although in the short-term this will be good news for customers receiving improved services, but says the move will now mean the mobile phone industry is dominated by three companies, the others being O2 and Vodafone.

Jason Glynn, communications expert at uSwitch.com, hopes the merger will boost the industry, he said: "With a combined 37% market share, this new major player will now have every opportunity to provide some really competitive deals and give the UK's lethargic mobile phone industry the wake-up call it needs."

Mr Glynn says three organisations having a 90 per cent share of the market will have a positive effect on the mobile phone industry.

"This new organisation will not have to make huge investments into customer acquisition and all funding can be ploughed into investment into new services, exploiting new technologies and competing more aggressively with O2 and Vodafone," he said.

However, James Parker, mobiles manager at moneysupermarket.com, has his reservations about the proposed merger as it means less choice for consumers, he said: "T-Mobile may currently be one of the smaller players but it has been creative with its tariffs and Orange also has unique deals such as Orange Wednesdays."

He added Ofcom should ensure the best interests of the consumers are considered at every stage of the merger.

"There will be many customers of both Orange and T-Mobile who have questions on what this will mean for them and whether the talk of better customer service and network coverage will actually be delivered if the merger is given the go ahead," he said.

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