London, England – Orange and T-Mobile look set to merge their UK businesses, creating a new market leader with 28.4 million customers.
The deal between France Telecom, which owns Orange and Deutsche Telekom’s T-Mobile will create an operation with around 37 percent of the UK market with sales in excess of nine billion euros ($13.5 billion).
With 27 percent of the market, O2, owned by Spain’s Telefonica, will be knocked off its current top spot and Vodafone will be a distant third with 25 percent.
Assuming regulatory approval – which is by no means certain – the deal is to be finalized by November, say the companies and ‘efficiencies’ are likely in the workforce – Orange currently employs 12,500 people in the UK, while T-Mobile has 6,500 staff.
It is likely that both brands will continue separately for at least 18 months after the deal is completed, but that they will eventually be merged under the Orange banner.
The merger could cost up to $1.3 billion as the networks decommission duplicated mobile phone masts and cut back their retail stores, but overall savings could top $5.8 billion, say the companies.
Apple’s reaction to the news could be interesting, as its current network of choice for the iPhone, O2, will no longer be the market leader.