Merger Of T-Mobile UK and Orange UK gets EU go-ahead

The European Commission has given the go-ahead for the UK mobile subsidiaries of Deutsche Telekom and France Telecom to merge.

The resultant joint venture between T-Mobile UK and Orange UK will create the UK's largest operator, serving 29.5 million customers.

The new company is expected to generate savings worth £3.5bn. Its pro forma 2009 revenues will be approximately £7.57bn and EBITDA of £1.38bn.

The management team will be led by Tom Alexander, currently CEO of Orange UK, as chief executive, and Richard Moat, currently CEO of T-Mobile UK, as chief operating officer.

The T-Mobile and Orange UK brands will continue to operate in the UK for at least 18 months after the completion of the transaction.

Tim Höttges, CFO of Deutsche Telekom, said: "The way is clear for pooling our resources to create an outstanding high-speed mobile broadband network in one of the most competitive markets in Europe."

Gervais Pellissier, deputy CEO and CFO of France Telecom, said: “This clearance will allow us to create a strong operator and to offer high-quality network and services to our customers."

Deutsche Telekom and France Telecom will  divest two 15MHz sections of their joint GSM spectrum by the end of 2011. Two 10MHz sections do spectrum will have to be cleared by 30 September 2013, with a further two 5MHz sections due to be cleared by 30 September 2015. An existing network sharing deal with 3UK has also been reinforced.

The joint venture claims it will be able to offer better 2G and 3G network coverage and quality, as well as a larger network of shops and improved customer service.

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