Orange and T-Mobile in merger talks

Orange and T-Mobile are in talks about merging their UK mobile phone networks, which would create the biggest provider in the country.

France Telecom and Deutsche Telekom are considering a merger that would see T-Mobile UK and Orange UK continue operating separately until 2010, before entering a 18-month review period to agree on a brand strategy.

If the deal goes ahead, the group’s overall marketing spend would be reduced by a third as either the T-Mobile or Orange brand would disappear.  A new brand for the merged networks would be implemented in the first half of 2012.

Tom Alexander, chief executive of Orange UK, confirmed that the two companies are in talks and said the brand strategy would be of vital importance if they were to agree a deal.

The proposed deal, which would need approval from the Competition Commission, would give each company a 50% stake in the joint venture.

According to subscriber data from December last year, the merged networks would gain 28.4 million customers in total (which represents around 37% of the UK market) and combined revenues of £7.7 billion.