ΒιΆΉΤΌΕΔ

A revealing quote : "Vodafone - which you might presume would be one of the big losers from this deal - saw its shares rise this morning, with the market apparently betting that less competition would be better for everyone's profits".
Everyone that is who has shares in mobile phone companies. On the other hand, less competition will inevitably mean price increases for customers. It's high time these "green shoots" City analysts stopped pretending that what's good for the glorified bookmakers called the Stock Exchange is necessarily good for the rest of us.

When I saw the article and clicked on the title link, I thought you'd gone all Northern with that Yorkshire-sounding title...

I think a lot of fuss gets made about mergers reducing choice and competition, but when the top players start reaching this kind of size it actually opens up opportunities for smaller players like 3 to position themselves differently.

At least I hope it does, being as I am with 3 :)

As an existing customer of T-Mobile this has already had an effect on me. I am due to upgrade my phone. When I enquired about a new phone the deal I was offered was more than twice the monthly cost of the same phone elsewhere, and it was a better all round minute/text/internet package. On visiting a T-Mobile shop the assistant said they were no longer interested in β€˜high end’ deals just cheapness and volume. One less customer for the new company to worry about.

Consolidation may be good for the operators, but is it good for the consumer? In reality, this means the UK will be reduced to just two actual networks (O2 and Voda network share). Consumers will have choice of brand, device and pricing plan, but if you can't swtich to another network with better coverage, where's the choice? And take it to the logical conclusion ... if OFCOM refarms the 900mhz spectrum as planned, would O2 and Voda move across to T'Orange's 1800mhz network too for their GSM services? Just look at OFCOM's 3G coverage map ... 2G is going to be with us for a long time still if we are going still have nationwide coverage. It almost seems as if telecoms is heading towards a "national grid" similar to the electricity industry, with a single infrastructure but lots of competing providers. If so, there are implications for an industry, as well as for consumers, that need to be considered by OFCOM.

Not even a single mention of the iPhone and its exclusivity deal with O2... i can see this being good for customers coverage, the things that bother me about this deal are what parts of their exclusive offers will the customers lose? for instance, Orange has some great things like Orange Wednesdays, the Animal tariffs and somewhat a rare thing but they still have some 12 month contracts, T-Mobile have the flext tariffs with the set amount of units, and the deals they have on the weekend with pay as you go.

Hopefully they have a healthy mix of the two, and this means they have a wider range of exclusive handsets

Would this story not be best served by the business blogs? It has very little to do with actual technology.

Nevertheless, whilst this might be a good thing for all the mobile operators (less competition) I feel that the consumer will lose out due to fewer choices.

@1 I agree fully with your comments on the stock exchange.

If a share price rises and falls when a company or industry gets itslef into the media spotlight, what bearing does it have in the REAL world. The one where everyone lives in and begins just outside the City!

I am no soothsayer, nor have I much knowledge of this market, but I would say that as a market it is often steered more by regulation than by competition.

Operators have found out that working together quietly produces better results than overt competition since, a little like the old days of banking, users who have a contract will tend to be slow to move from one tariff to another, let alone one company to another.

The gains are often in the junior market therefore. The "disposibility" of phones as perceived by the teen market, in that obsolete = useless, gives operators the opportunity to pull in a new customer. And since many of these customers will be on pay-as-you-go, there is the possibility of getting someone embedded within the contract system.

Competition is meant to be healthy for a market, but competition certainly has not been responsible for recent falls in the roaming tarriff - that took the EU to step in and start banging heads - even if the PR departments of the operators started claiming they were actually thinking of doing this anyway. haha!

Taking most of that into account, I see little benefit or detriment to the consumer with this merger; it is easier to argue that the consumer gets a pretty awful deal in the first place and they should not expect that to get better without the aid of the EU. For good or bad, the EU seems to have a healthy intolerance of high tech companies - and in this case it is good that they have.

I don't believe you will see any true, consumer benefiting competition in this market until an incompatible technology comes along that is better and cheaper and can pull the rug from under the feat of the current market entirely. The big players are too big and too powerful now, have been for some time.

Maybe the biggest innovation will be in simplicity. When someone realises that there is a massive market out here that only wants to be able to phone and thinks the rest just gets in the way of the rest of your life.

It would be good if this kick starts Telefonica into improving O2's UK 3G coverage and offering more competitive deals on top-end handsets (I don't mean cheaper iPhones, I mean better deals on the call packages - data calls can't cost as much as they charge and claim).

They've sat at the top of the pile since inheriting BT Cellnet and need a good kick up the bum, especially as they're trying to position themselves as 'the' smartphone company.

It's interesting to read all the arguments in favour of this deal going through. And I'm not surprised that just about everyone in the industry is supportive. They will all make more money as prices go up.

But I'm still not convinced that this deal is in the best interests of the consumer. Red-blooded competition is nearly always positive in my view and keeps prices lower.

I also suspect that talk of higher investment if the deal goes through is just clever PR by the industry and the City. Let's not forget that we've had periods where the telecoms industry has massively overinvested in infrastructure. It's economically more efficient if the industry only invests when there is a clear business and economic case for that spending.

Yes, it looks like this merger will get the thumbs-up. But I'm not convinced that would be the right decision.

This is extremely bad for the UK market, and the monopolies and mergers competition must look in to it

1) Drastically reduces customers choice
2) Reduces competition
3) Increases the the 'T-Oranges' buying power so they will be able to squeeze manufacturers more than other companies can
4) It's just to large a market share, they should be forced to sell off the PAG & Pay Monthly propositions to different companies, so as to spread the customer base, or sell up to an unrelated 3rd party who doesn't have a preseance in the UK, someone like AT&T, Verizon Wireless or NTT DoComo

This should not and not be ratified by either the inept UK government, the toothless watchdogs or the corrupt EU set-up

This is good for no one except a few shareholders, for whom it will be cigar & brandy time

@CaledonianComment

"On the other hand, less competition will inevitably mean price increases for customers."

It probably will, yes. But this would not be a bad thing if in return for higher tariffs we see improved network performance, reliability, and bandwidth. There is a risky 'race to the bottom' in the UK telecoms market, across phone, broadband, and mobile. It's great while we get cheap services, but it also causes operators to defer investment in infrastructure and to broaden their customer base at the expense of good service. I would prefer we payed a moderate premium, and received a better service, than that we pay less and less for a diminishing product.

@7 - very good point. A business post really, nothing to do with tech....

If this is like any other mergers it won't be good for the consumer. Good for the shareholder of course but not the consumer.

I'm with T-Mobile as one of their mobile broadband users and their service is very poor.

I don't see that changing with a merger.

What I do see happening, is job losses as both companies will want to "streamline" their business arms.

And I agree with #7 - business not tech.

At the moment, mobile companies spend not-so-small fortunes advertising their respective offers as an exercise in confusion marketing.

The sooner the various companies (be they 4, 3 or even 2 in number) come to terms with the fact that, when I want a new mobile phone, I will make the effort to track down the deal that is best for me - NO 'selling' is necessary - then the sooner they will be able to invest in their infrastructure and customer service department.

If the companies cared as much about keeping their own loyal customers as they do about poaching other companies' customers, the industry might stabilise and, as a certain Derek Trotter might have put it: "Everyone's a winner!"

T-mobile use the Vodafone network currently?

@Edbowsher - 'But I'm still not convinced that this deal is in the best interests of the consumer. Red-blooded competition is nearly always positive in my view and keeps prices lower.'

But then isn't red-blooded competition what has driven the market towards handset exclusivity deals and lock-in contracts for customers who want the latest and greatest, both of which have blighted the handset market and left it in its current state?

There are countries in the world where long-term contracts are illegal, meaning the phone isn't subsidised and more money is spent on infrastructure and customer service rather than paying Apple/Palm/etc. hundreds of millions of pounds of our money to sell 5% of the market expensive handsets.

Those criticising this as a non-tech business story might want to review the content of the What makes a tech story? thread, which foreshadowed such a trend.

@jaxnpete #16

Nope they have their own GSM/GPRS/3G/HSDPA (2g/2.5g/3g/3.5g) network, but they also have a network sharing agreement, to share 3g infrastructure with '3' (the network 3) whom have the UK's largest 3G/HSDPA, and orange interestingly have the same agreement with Vodafone

Where this deal leaves these infrastructure deals is another concern to consumer who may find the benefit they've been receiving in the enlarged data coverage agreement at risk.

Also Virgin Mobile use T-Mobile's network to carry its calls and data.

Personally I hope an outsider (US, Japanese or other) comes in and scuppers the deal - If they don't I pray it doesn't go through, although the negative effects won't be seen for a few years yet

"His argument went like this - we already have a more competitive market than in any other European country. France has just three big operators, Spain four, and in Germany the two biggest players have more than 80% of the market."

The rest of Europe has massive monopolies therefore we should do the same?? Is he as dumb as how that reads?

How about the mobile companies in the rest of Europe being broken up instead?

T-Mobile-Deutsche telekom, Orange-France Telecom, O2-Telephonca Spain. Where is poor old BT and I work for them!

wouldn't a 'Hutchison Heritage' deal between Three and Orange be better for customers ?? I cannot understand why Hutchison sold Orange anyway - it was surely a prize asset ?

Maybe someone out there can enlighten me...

"18. At 6:36pm on 08 Sep 2009, I Ate All The Pies wrote:

Those criticising this as a non-tech business story might want to review the content of the What makes a tech story? thread, which foreshadowed such a trend."

So may you. A merger is a business thing, not a technology thing, unless of course T-Mobile and Orange intend to merge the network they borrow from others along with merging the mobile phones they sell with each other.

"21. At 7:42pm on 08 Sep 2009, Celticfamily wrote:

T-Mobile-Deutsche telekom, Orange-France Telecom, O2-Telephonca Spain. Where is poor old BT and I work for them!"

BT did at one point own O2 but decided to sell it off if I am not mistaken.

BT are what is wrong with the infrastructure of home fixed line broadband, so they are rightly where they should be in the mobile broadband network - no-where.

"20. At 7:20pm on 08 Sep 2009, deamon138 wrote:

"His argument went like this - we already have a more competitive market than in any other European country. France has just three big operators, Spain four, and in Germany the two biggest players have more than 80% of the market."

The rest of Europe has massive monopolies therefore we should do the same?? Is he as dumb as how that reads?

How about the mobile companies in the rest of Europe being broken up instead?"

I agree with that entirely. There should not be a monopoly on anything, it increases prices for the consumer and companies tend to get complacent because there is no competition.

This merger does nothing to help the market at all.

All the other comments have not mentioned one thing. The people who work for T=Mobile.
T-Mobile have initiated bullying tactics which is causing staff, including myself, to leave in droves, as it has become intolerable to continue to work in the 'sweatshop' environment that now prevails.
Obviously a cost cutting exercise in preparation for the 'merger' announced today.
It wasn't really a surprise that it is with Orange, as the new T-Mobile chief came from Orange. It's all been stage managed with talk of takeover by Vodafone and O2 used to deflect attention from the intended merger partner. Why would someone like Richard Moat move from Orange to an 'ailing T-Mobile' if this merger was not the intention.
The whole thing stinks and it's the loyal workers who helped build up T-Mobile who are the real victims of years of mis-management culminating in today's announcement.

We went through this combination of Orange and T-Mobile in the Netherlands. Not good. T-Mobile did not have the same good deals that Orange had. Furthermore the combined operation was virtually impossible to reach. Solution: I moved to a cheap prepaid provider when my subscription ran out. Saved myself a lot of money too!

There are technical similarities between these networks that don't exist between the others so this is could be a great benefit for the customers of T-mobile and Orange. As an Orange and Vodafone user I can vouch for the superiority of the Orange network. There will be some attrition for the staff of both companies but as both are struggling to make profits the situation could be worse for them if the merger does not go ahead. If it does there could be benefits for customers and O2 and Vodafone will need to look to match the deals that may be forthcomeing.

Of course this is going to be bad for the consumer. When one big operator takes over another it is simply to remove that competition from the market. With less competition, you have more scope for offering less competetive deals.

"Neither T-Mobile nor Orange has been that successful in the fast-growing mobile broadband area"

Last I checked, T-Mobile had the second largest mobile broadband customer base after Three.
That seems pretty successful to me...


@5: the deal for O2 and Vodafone to share each others networks was only put forward less than 6 months ago, I very much doubt it's come into force yet.
But, even if it has, to try and describe a market in which T-Mobile and Orange have merged and O2 and Vodafone network share as only having two players is patently ridiculous.

@9: er, no.
O2 have only been top dog for the past couple of years, prior to that it was Vodafone pretty much since the market started.


I really don't understand why people believe this will automatically result in a worse situation for the end customer.

I for one welcome this move as the combined network will not be that much larger than either O2 or Vodafone - it won't be half as bad as if either of them had bought out T-Mobile, which had been heavily rumoured of late.
On top of that, Vodafone and O2 who are the two networks that will be leap-frogged do tend to take their customers for granted a lot more than Orange or T-Mobile and will be forced to re-assess their practices to compete.
Furthermore, T-Mobile haven't really been all that competitive for quite a while, so the loss of them as a separate entity is unlikely to have any major impact on competition - really the only thing they bring to the table are their Flext packages but at a minimum of Β£40/month, they don't appeal to the majority of customers.

Industry experts have been screaming for some sort of market consolidation for a long time now as the unusually high level of competition in the UK mobile market is starting to hurt all those involved - and that goes for customers as well as the networks.

Anyway, whether you believe this to be a good thing or not, had it (or something similar) not happened soon, T-Mobile in the UK would've gone bust anyway and I cannot see how that could possibly have been a preferable outcome.

Then there are the MVNOs - mobile virtual network operators - like Tesco and Virgin, who will continue to invigorate the market with some fresh ideas.

Can someone explain what the difference between these and the big companies is to me? Is it about the numbers, or the infrastructure, or being part of non-mobile focussed companies?

Overall, I'm not in favour of T'Orange, but since I'm a PAYG with Virgin Mobile anyway (who are really quite nice to their PAYG customers) I don't think they'd want me anyway. Not unless there's a Β£3 a month tariff out there somewhere.

Virgin, Tesco, whoever, Mobile - The "MNVOs" - have no infrastructure of their own. They use the networks of the larger companies (Orange, O2, Voda, etc.) to carry their calls, much like many landline service providers use the BT network to carry data and calls (most DSL services, for example).

Therefore while you pay Virgin, you are actually using T-Mobile's (if I remember correctly - I am probably wrong on that) network. Because they pay someone else as their overhead, rather than directly supporting the physical infrastructure, they have a lot more freedom as to how they target and market their product.

@nkkingston #29
If you're on Virgin then this directly affects you - What if they turn of the local T-Mobile transmitter (which your Virgin connection currently uses) because they think the area would be better suited to just use the Orange one that is in the area, and you then find you don't get coverage where you need it

This is why such caution must be taken before this is given the all clear, and one of the many under-lying reasons why this is not good for consumer, even those who /think/ have no reason to care.

I am hoping that for some reason this will fail, and a completely seperate company (AT&T, Verizon Wireless, NTT DoComo etc...) come inand maintain the 5 seperate network structure we currently have.

The EU, Government, Ofcom and Office & Fair Trading have already decided that the UK needs 5 infrastructure operators when they allowed a fifth entrant in to the market (by having one slot artificialy lowered in the 3G bidding process) Why then would they allow two of the companies to merge their infrastructures.

They may also dominate the handset buying process, making it more likely they will have exclusives excluding the over 60% of customers not with T-Mob/Orange from buying them

This is bad bad news, and I fail to see a single ray of hope in this deal for anyone other than Deutsch Telecom and France Telecom's board members.

I hope the UK market doesn't end up like the Canadian one - 3 big players all with a 'gentlemen's agreement' not to undercut one another, making up ridiculous extra fees like the 'system access fee' or incoming text message fees.

The british mobile market seems very healthy and I doubt this will damage it.

What does this new amalgamation mean for shoppers? an interesting step forward to a future of new products from various companies complementing each other. How?

Well first companies like Twinings can create Orange Tea for the Sales demo meetings.

Companies producing sports equipment for golfers will have the latest Orange Tee.

I do question the invention of the logo name of the new company for surely if you put the T before the Orange it doesn't mix very well. Should you write T Orange and don't get the gap correct you could end up with TO range, and the ΒιΆΉΤΌΕΔ service.

Of course in the event of a double name for the logo, to avoid any upset about one company's name taking place at the front, and the other having to go second - a totally new name shared by both in the language may have a happier business future for life.

Now there's a competition for the company's to promote with interest, if you consider that to be a good idea. How about 'RingIn' for starters.

I would question the premise behind the argument that the UK is seeing 'cut-throat' competition.

What I see is operators coming with a flurry of offers for customers, each with different benefits and drawbacks, and each with different combinations of 'free' minutes and text messages (which aren't really free, but pre-paid), different times of the day for those said 'free' minutes and so on.

It's mind-boggling complexity aimed at making it harder for the customer to actually compare the deals. Why not compete on the 'cost per minute' premise? Because that would actually cut costs. Competing with all these fancy offers doesn't actually cut costs for customers a lot of the time, and almost always binds them for one or two year long deals.

Safe, steady revenue for the operators.

The UK mobile phone market isn't seeing cut-throat competition. It's a cartel.

And taking one member away from the cartel will just make it easier to control. The only exceptions are Three and the MVNOs, but the latter depend on access to the networks of Vodafone, O2 and T'Orange (if the deal goes through).

Do you really think the operators will start pulling down masts?

The coverage in my area (south London) on O2 is shocking - i'd love to be able to use a different operators mast in addition to my own, then I could use my phone in my own house. (really should have checked before signing the 18 month contract!)

Offcom really should have forced a single infrastructure for each type of network, to work much like the national grid, or the gas network (not like the rail network though).

there must be loads of places which have great coverage from all the suppliers, because they have 4 masts all next to each other...

They might have a large market share at the moment, but if their customer service levels drop then they'll soon drop to a lower share as people come to the end of their contracts.

As for 3G coverage improvement, I bet they cover pretty much the same areas, so the only way they'll improve is to shift the equipment from redundant base stations and install it in areas where there is no coverage, which will obviously cost money and take time, so I would expect no coverage improvement in the short term but a lower standard of customer service as they seek to cut costs.

The merger between Orange and T-Mobile is going to create a new company called "Ora-Bile"

lol

even though network 3 is so small it has one of the biggest 3g networks which orange and t-mobile feed off. So say if you are in a small town 3 will have a 3g netowrk their however t-mobile or orange have the basic 2g network so t-mobile and orange have a contract with 3 to use their 3g netowrk however if you are in Manchester as it is a much bigger area T-mobile and Orange have their own 3g network as it is alot more built up.

It would be hard to force 3 out of the mobile industry even though it is a little smaller than other networks.

By T-mobile and Orange joinging together to make T-orange will make them more powerful however they still have to use 3 network to keep their 3g signal high

If you have notice you cant place a 3 network sim card into a phone that is not 3g even if it has been unlocked, This shows how powerful 3 are they have one of the biggest netoworks with 99% of the UK covered which is amazing big

In the mobile market now t-mobile and 3 give the best deals

tmobile like to give aprox 50 more mins than 3 where as 3 have a bigger unlimited text limit and chuck in windows live messenger and skype and even mobile internet now on most contracts which shows how much competition their is, if t-mobile and orange was to merge together the competition would still be their doing the cheapest mobile deals, the market will not change appart from t-orange having a bigger customer number than other businesses

Rory:

I hope it will be good for shoppers, but, I am skeptical....


=Dennis Junior=

The Merger between T-Mobile and Orange is a welcome one to the people of UK. There are now many issues like signal interoperability, attenuation, noise addition and so on with the mobile networks including mobile broadband. The broadband comparison in UK is less when we look in to the other countries but with the merger of these two network which is now known as T-Orange, it gives some options for them to look in to the issues and provide a good service for the people. They can now merge their towers and signaling stations to make every customers to be in the Hot spot areas and receive a good network. The main Strength of this merger lies in the number of towers they have and the area to which they can cover. Though people talk about the issues to the shoppers and the reduction in the number of operators, one can get a great quality service from this merger.

What does the proposed merger mean for Landlords?
Basically we had each of the giants as tenants for which we received a modest rent. Now Orange want to be able to assign to other users meaning we only have one tenant and one rent.They want to save costs by joining together. It means that we lose tenants and thus rental income because they are not offering extra rent proportionate to their proposed assignments.They are all delaying entering into new agreements at the end of their previous terms and using the "chipping away" process to bully Landlords into agreeing to their requirements.This seems to be a Cartell operating as they are all in touch with each other..Perhaps it should be referred to the Manopolies and Merger Committee for investigation as well as Offcom. Could we hear from other Landlords as their voice has not yet been heard.

Putting "big 3" future competition concerns aside, I really should mention the following:

T-Mobile have the reputation for having the worst network infrastructure in the UK. Their ability to cut deals was due to chronic lack of investment in the infrastructure, which is why it used to be the running joke that anybody on T-Mobile wouldn't be getting coverage in the more fringe areas, whilst those on Vodafone and Orange would. O2 is always variable, but they've done a good job over the years of upgrading their network, although certain parts of London are still very much hit and miss.

For those on T-Mobile I very much doubt you would be adversely affected coverage-wise by the Orange and T-Mobile merger! Orange are still highly regarded as much more robust in relation to infrastructure, and miles ahead of T-Mobile.

I really believe that coverage for those MNVO, such as virgin-mobile who use T-Mobiles network masts, will actually result in better coverage overall.

I may be touching a virgin-mobile cheap SIM-only contract soon because of this merger; you only need to look at a history of one2one and T-Mobile to see just how many customer comlaints of coverage there were compared to the other networks, and just how many customers they have lost over the years.

This is well documented through network analysts, as well as ΒιΆΉΤΌΕΔ's watchdog, that revealed how T-Mobile ignored their infrastructure for years.

As a result of being careful about choosing contracts over the years, I can only hope T-Mobile gradually is engulfed by Orange. If, for cost reasons, Orange's infrastructure is scaled back, I will be particularly sad for users left.

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