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Orange merger faces delay

Steve Dinneen
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THE Office of Fair Trading (OFT) said yesterday it will probe the proposed merger between Orange and T-Mobile, which could delay the deal by months.

Orange had hoped to tie up the deal to become the UK’s biggest carrier by the start of the summer. But the OFT’s announcement that it will look into the matter could delay the deal until the autumn, according to sources close to the issue.

The OFT yesterday applied for permission from Brussels to investigate after voicing concerns over the impact the proposed deal could have in the UK. They are acting on concerns raised by rival carriers. The deal is not seen as such a major issue by the European Commission as the new
company’s market share in Europe would still lag behind rivals.

Analysts are confident the deal will still go through but, should the European Commission grant the OFT permission to look into the deal as expected, it is likely to insist the new company sells off some of its spectrum range.

Orange, owned by France Telecom, and T-Mobile, owned by Deutsche Telekom, both own large parts of the radio spectrum – the waves used for call and data usage – and their rivals claim the combined ownership would be detrimental to competition.

The combined companies would own about 84 per cent of the spectrum in the 1,800 megahertz range, which has provoked concerns from rivals, including 3, O2 and Vodafone.

The European Commission must decide by 1 March whether they will allow the OFT to investigate the merger, which would give the new company a customer base of 29.5m, overtaking bitter rivals 02, the industry leader, and Vodafone.