Orange and T-Mobile deal to be given green light by Brussels

BRUSSELS is expected to give the go-ahead to the telecoms merger of the UK interests of France Telecom (Orange) and Deutsche Telekom (T-Mobile) this week.

The European Commission green light is set to create an Orange/T-Mobile group that will be the biggest mobile operator in Britain, with more than 30 million customers and a market share of 37 per cent.

The two brands will both be retained, with analysts saying at the weekend that the European Commission was probably persuaded to allow the deal because it will see lower prices for consumers.

Crucially, it is understood a number of concessions were offered by Orange and T-Mobile on giving up mobile phone spectrum – or bandwidth.

The Office of Fair Trading and British industry regulator Ofgem are believed to have told the EC that they are comfortable the UK merger will not be overly detrimental enough to press for a UK-based competition probe.

It is an about-turn by the OFT, however, which said only on 3 February that the joint venture might have a significant effect on competition in mobile telecommunications in the UK.

Analysts said yesterday that other major players in the British mobile telecoms market, O2 and Vodafone, would face a much greater possibility of being blocked by the Competition Commission if either of them had tried to take over T-Mobile because it would take their UK market share to 43 per cent and 40 per cent respectively.

It is estimated the tie-up and resulting de-duplication will cut the Orange and T-Mobile groups' costs by 445 million from 2014.

Analysts say this figure is expected to include cost efficiencies across networks, information technology, marketing and advertising, and the two groups' combined 650-plus shops.

Significant job losses among the combined 19,000 workforce are also expected, they said.