T-Orange Deal set for 2010

The consolidation of the U.K. mobile market has neared completion as T-Mobile UK and Orange UK have reached a merger agreement.

The much-anticipated deal announced in September was hammered out behind closed doors but finalised late yesterday evening.

The “merger of equals” will see Deutsche Telekom put in T-Mobile UK and its 50 percent share in mobile network joint venture MBNL with 3 UK, while France Telecom will contribute Orange UK which includes £1.25 billion of intra-group net debt.

“The relative terms of the transaction as announced on 8 September were fully confirmed,” said Gervais Pellissier, deputy CEO of France Telecom,

The deal must now be ratified by the respective boards of directors and the regulatory authorities including the competition commission.

Approval is by no means guaranteed as the U.K. is the only market in Western Europe where no operator has an overwhelming market share. The new deal will give the merged company a share of 42.9 percent.

The merger will see the U.K’s mobile more closely resemble other European countries’ yet conditions may be put upon the merger to prevent smaller networks being eclipsed.

As we reported in September, the brands will remain separate for 18 months following completion of the merger in which time branding strategies will be finalised.

Attention has then turned to the name of the new venture. Analysts have suggested the T-Mobile brand is less likely to dominate, so T-Orange looks as good a shout as any.

The companies anticipate completing the deal in the first half of 2010.