14 DAY TRIAL // It seems that T-Mobile UK might have finally found a new family, as the company announced today a merger with Orange UK. The struggled Deutsche Telekom subsidiary has been reportedly put on sale by its parent company, with all other three major carriers in the UK interested in its acquisition: Orange, O2 and Vodafone.
While at the moment T-Mobile is ranked fourth in the United Kingdom, the merger will result in a carrier that accounts for the largest market share in the country, 38 percent. Combined, T-Mobile and Orange will have a number of around 30 million customers, while Virgin Mobile, which uses T-Mobile's network, is excluded from the count.
The deal between the two has been announced as a “merger of equals,” with neither of the parts taking over the new entity. The two companies intend to run the joint venture independently, and the integration of their business is expected to cost between £600m and £800m. The merger will result in a business with sales of around 9.4bn euros.
T-Mobile UK has been in decline for a series of quarters, although its financial results for the second three-month period of the year showed an improvement. The carrier has been estimated to value between 3 and 4 billion Euros, yet it seems that variance in asset valuations might have been one of the main reasons for which buyers didn't rush to take over the company.
The competition on the UK mobile phone market is a rather tight one, and it is also expected to become even tighter in the future. The U.K. Office of Fair Trade is expected to look into the deal between Orange and T-Mobile, as the two will own a market share larger than 25 percent. The two companies stated they intended to create “a new mobile champion” and that the deal should be closed by November.