Orange offers juicy concession

Steve Dinneen
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Orange and T-Mobile hope to avoid an Office of Fair Trading (OFT) investigation into their proposed merger by offering to sell off part of the mobile spectrum.

The European Commission are looking into the deal, which would create the UK’s largest mobile provider with £29.5m customers, and will decide by 1 March whether the OFT can undertake its own investigation.

The firms are desperate to avoid a lengthy investigation into the merger by UK regulators and have offered to part with 25 per cent of the hallowed 1800MHz spectrum.

They have also agreed to allow 3, the UK’s smallest mobile operator, to share its infrastructure in a deal similar to one that already exists with T-Mobile. Orange and T-Mobile currently own most of the spectrum that allows super-fast internet connectivity for fourth generation mobile devices. But rivals O2 and Vodafone have raised concerns that the new company would have an unfair advantage in the increasingly important smartphone market.

The Commission has confirmed it has received an offer of concessions from Orange and T-Mobile. It has sent a detailed questionnaire to rival companies to gauge whether the proposed deal is palatable.

But analysts believe the offer to sell 25 per cent of the spectrum will not be enough to convince rivals not to push for a full competition investigation.

The pair would own most of the 1800MHz spectrum that allows super-fast mobile internet.

They announced plans to merge in September.

Both have struggled to compete with market leader O2 and its close rival Vodafone.