T-Mobile and Orange UK to merge

Orange UK and T-Mobile have announced plans to merge their UK operations.

Orange UK is owned by France Telecom and T-Mobile by Deutsche Telekom. The new company, which will be split equally between the two, will account for 37 per cent of all mobile customers in the UK - around 28.4 million people.

One of the immediate benefits for customers of either of the two companies should be improved network coverage, though mobile broadband coverage maps recently released by Ofcom suggest that the two mobile networks focus heavily on urban areas to the detriment of rural areas.

However, there may very well be redundancies among Orange UK's 12,500 staff and T-Mobile's 6,500 UK employees.

Timotheus Höttges, chief financial officer of Deutsche Telekom, said: "We will become market leader - our customers will benefit in many ways, for example from the best mobile broadband offer in Britain."

Currently there are five mobile operators in the UK market - Orange, T-Mobile, Vodafone, O2 and Three.

James Parker of price-comparison service Moneysupermarket.com said the deal could mean less choice for mobile customers.

"If this merger does go ahead then it will ultimately mean one less mobile operator in the UK market and could potentially mean less choice for the consumer," Parker said.

"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," he continued.