Feeds

T-Orange: How it's going to work

Telcos to slash and burn ahead of 2012 hook-up?

Secure remote control for conventional and virtual desktops

The T-Mobile and Orange brands will survive for at least the next two years in the UK as the telcos combine their operations here - though their employees might not.

The merged operation of Orange and T-Mobile is expected to save €445m in operational expenditure annually, a saving that will come from shutting shops, dismantling masts and closing duplicated departments. But that's going to take a couple of years and it won't be until that process is completed that we'll find out what the new venture's going to be called.

Today's announcement is just that: nothing has been signed as yet, as the companies are now commencing a due-diligence process to make sure there aren't any debts hiding behind the sofa. This also gives them a couple of months to put the paperwork together. The idea is to have a signed agreement in place by the end of October, and then let the EU (and Ofcom) have a think about the competition issues.

No one has ever done this before, so the process for approval isn't clear, but the UK is a very competitive market with lots of other operators. So Orange and T-Mobile reckon regulatory approval will come in about six months, at which point the deal is completed and the company starts realising those synergies they keep talking about.

That starts with Orange chucking in £1.25bn to make up the difference in value between the two companies. Deutsche Telekom then loans £625m to the new venture which it then repays to Orange: that leaves the new company owing £625m to each of its parents, and equally owned by them both.

Combining the operations is expected to take about 18 months, and the two brands will continue to exist for that period (perhaps with a footer on the logos to indicate shared ownership). Meanwhile, duplicated departments will be shut down, 120 shops will close, call centres will be consolidated and the physical networks will merge into a single infrastructure supporting both 2G and 3G technologies.

Right now T-Mobile has around 10,000 2G base stations, while Orange runs about 13,000; both companies operate around 7,000 3G base stations. T-Mobile has already started upgrading all its 2G bases to support 3G and that will be the strategy for the new venture, which eventually plans to have between 14,000 and 16,000 bases in operation.

Obviously that represents quite a saving, though the new venture reckons only a third of the savings will come from reduced cost of infrastructure: the other two-thirds will be saved by reductions in sales and marketing and closing down the duplicated departments.

Virgin Mobile, who could have walked away from its MVNO arrangement with T-Mobile thanks to the "change of ownership" clause in its contract, are apparently all in favour of the deal. Equally unaffected will be 3, who already has a network-sharing deal in progress with T-Mobile. During the press conference this morning 3 was variously described as "highly supportive", "strongly supportive" and "hugely supportive", so we gather that the operator is in favour of the deal.

So some time around the beginning of 2012, having made all the savings and laid off the excess staff, it will just remain for the new venture to sit down and decide what it's going to call itself. Suggestions on a postcard please. ®

5 things you didn’t know about cloud backup

More from The Register

next story
UK fuzz want PINCODES on ALL mobile phones
Met Police calls for mandatory passwords on all new mobes
Canadian ISP Shaw falls over with 'routing' sickness
How sure are you of cloud computing now?
Don't call it throttling: Ericsson 'priority' tech gives users their own slice of spectrum
Actually it's a nifty trick - at least you'll pay for what you get
Three floats Jolla in Hong Kong: Says Sailfish is '3rd option'
Network throws hat into ring with Linux-powered handsets
Fifteen zero days found in hacker router comp romp
Four routers rooted in SOHOpelessly Broken challenge
New Sprint CEO says he will lower axe on staff – but prices come first
'Very disruptive' new rates to be revealed next week
PwC says US biz lagging in Internet of Things
Grass is greener in Asia, say the sensors
Ofcom sees RISE OF THE MACHINE-to-machine cell comms
Study spots 9% growth in IoT m2m mobile data connections
O2 vs Vodafone: Mobe firms grab for GCHQ, gov.uk security badge
No, the spooks love US best, say rival firms
Ancient pager tech SMS: It works, it's fab, but wow, get a load of that incoming SPAM
Networks' main issue: they don't know how it works, says expert
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.