T-Mobile: we must join up with Orange

City A.M. Reporter
T-MOBILE needs to merge with Orange or the two groups will struggle to compete with the biggest operators, the boss of the German firm’s British arm said yesterday.

Speaking at the Telecomfinance 2010 conference in London, T-Mobile UK managing director Richard Moat also said he thought a regulatory examination by Brussels would be faster than inspection by British authorities.

Deutsche Telekom’s T-Mobile and France Telecom’s Orange have agreed to form a 50-50 joint venture that would grab the top spot in Britain with a market share of about 37 per cent, ahead of current leader O2, owned by Telefonica, and Vodafone.

The two sides are currently waiting to hear whether the merger will be examined by the European Commission or British authorities.

“Brussels would be faster because it has established deadlines whereas the UK has rather more relaxed deadlines,” he told reporters.

“If it were dealt with in Brussels on a stage one process then you could be looking at approval by the end of February. If it came back to the UK and it was dealt with by a stage two process you could be looking at 2011 and I don’t think that’s in anyone’s interest.”

Moat told the conference that the high level of competition in Britain had forced the two sides to look at a merger, adding: “Without change the smaller scale network operators of which Orange and T-Mobile are two would not be able to compete across the board with the two big operators. We just don’t have the necessary scale, and scale in mobile telecoms is vital.”

Analysts have said a merger between the two companies could actually help all operators.