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Orange and T-Mobile Merge Soon to be Approved

Orange and T-Mobile Merge Soon to be Approved This week it is expected that the merger between Orange and T-Mobile, forming the biggest mobile phone operator in the UK, will receive regulatory approval.

The European Commission has decided not to pass the enquiry back to the UK regulator, despite fears from the Office of Fair Trading (OFT) that the merger will “significantly” reduce competition.

What convinced the commission to allow the merger to go ahead were assurances from Orange and T-Mobile to protect the future of 3, the UK’s smallest mobile phone network. The two companies agreed, last night, that they would extend a network-sharing deal with 3 to 16,000 mast sites across the UK.

In fact, it was concerns about the future of 3 that prompted the OFT to ask for control of the investigation earlier this month. The OFT was worried that reducing competition from five players to three in the UK mobile arena would irrevocably change the mobile landscape.

There will also be an agreement stated between Orange and T-Mobile that they will let go of 25 per cent of their combined 1800 MHz spectrum, the wavelength required for super-fast mobile broadband internet.

It is not known whether competitors Vodafone and O2 will challenge the merger, but it is understood that they have pushed for more of the valuable spectrum, granted in the 1990s, to be relinquished by the merger companies.

Amidst concerns that the merger could increase the cost of mobile phone contracts, consumer groups such as Which? had been in favour of a UK investigation.

At the same time, France Telecom, which owns Orange, and Deutsche Telecom for T-Mobile had been pushing for a European investigation rather than a UK one which they thought would be slower to reach a decision.



Orange news posted by Marilyn on 25 February 2010

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