Blog 2: Mobile giants plan merger

The mobile giants Orange and T-Mobile have revealed plans to join their forces and set up a new mobile phone network.

If the two companies become one, they will have 28.4 million customers and a market share of 37 per cent. France Telecom and Deutsche Telekom, the owner of Orange and T-Mobile are having negotiations over the 50/50 joint venture. If the deal persist, they have promised better coverage and customer services. But on the other hand they warned there will be job losses in the United Kingdom. According to an Orange spokeswomen the job losses will be the result of more efficiency. The deal, expected to be signed by the end of November and completed in 2010, is a measure due to the struggle of the two companies in a highly competitive market.

Customers were told that the merger will bring benefits but if the deal would fail, they wouldn’t see any changes for the first 18 months.
According to the France Telecom’s financial officer, the deal will reinforce fair competition and will provide benefits for the customers due to new services and technologies. They also hope, on a long run, to make big annual cost savings.
Al last, the merge of Orange and T-Mobile will help both firms to enter into competition with the other two giants Vodafone and O2.

The merger will have some positive and negative results. On the one hand the deal will have some benefits as a result but there will also be some job losses. According to me this deal is a very good decision because the two companies couldn’t deal with the competition of Vodafone and O2. I know that there will be some job losses but it’s better that they join their forces instead of going bankrupt. I hope that the two firms can realize their plan and compete with the other mobile giants.

Navaron Walraeve

Source: http://www.thesun.co.uk/sol/homepage/news/money/2627253/Mobile-giants-plan-merger.html