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T-Mobile and Orange to merge

Deal expected to go through in October

Orange and T-Mobile have announced plans to merge in a deal that would create the UK's largest mobile operator.

The two companies hope to complete the deal in October, provided the plan gets approved by competition regulators. Orange and T-Mobile are currently the third and fourth largest operators in the UK, but the combined company would leapfrog O2 and Vodafone to become the UK's largest with 28.4 million customers and a 37 percent share of the market.

If the merger gets the green light, it's expected that the two brands would continue to operate for at least 18 months while the company decides on its future marketing strategy.

The partners said the deal would "bring substantial benefits to UK customers", including improved network coverage and "enhanced indoor and outdoor network quality for 2G and 3G services".

It would also result in £3.5bn savings as the operators bring down masts, close retail outlets and trim call centre staff. Orange currently has 13,000 staff in the UK; T-Mobile has 6,500.

However, James Parker, mobiles manager at moneysupermarket.com, said the deal would ultimately mean one less mobile operator in the UK market and could potentially mean less choice for the consumer. "T-Mobile may currently be one of the smaller players but it has been creative with its tariffs and Orange also has unique deals such as Orange Wednesdays."

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