T-Mobile Merger With 3 On the Cards?
T-Mobile UK could be sold by owner Deutsche Telecom because of mounting competition in the mobile industry. Shareholders including the German government and US private equity group, Blackstone, have been lobbying for the restructuring of the main business amidst profit warnings and falling UK revenues (down 21% year on year for the first quarter of 2009.) . There are two likely outcomes for the ailing mobile network
- a complete buyout by one of the top 3 UK mobile operators Vodafone, 02, or Orange
- a merger with existing partner 3 (or possibly Orange)
At the company’s annual AGM, head of finance Timotheus Hoettges said “The British market is highly competitive and has comparably low margins. In our view consolidation is a means to take excess capabilities out of the market. Nothing is unthinkable on our side.”
What does this mean for mobile broadband users?
Whilst T-Mobile’s phone business has seen relatively lacklustre performance in comparison with the top players, it’s mobile broadband division has fared better. It’s Web n’ Walk data package was one of the first to introduce a flat rate of £5 a month for 3G internet access, whilst other operators charged per megabyte downloaded. T-Mobile was also the first UK network to partner with Google, noticeably on the Android project.
A merger with 3 would make sense according to some industry analysts. In 2007 the two companies formed the Mobile Broadband Network Ltd organisation, which claims to be the “world’s largest known active 3G network consolidation agreement”. The collaboration aims to build Europe’s most extensive HSDPA network by combining their 3G infrastructure including cell masts and repeater stations. A full merger could create a mobile broadband giant which could easily compete with the ‘big 3′ operators in the UK.
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Well, you were half right! T-Mobile’s sale didn’t come as a big surprise to those of us in the industry, they had been struggleing for some time and it was rumored that someone would buy them before the year was out. The fact that it was Orange makes little difference, who ever bought them would end up as the biggest in the industry as they would effectively double their user-base. Although this is being spun as a ‘merger’ I will be surprised if the T-Mobile name lives on when Orange are so high profile on the high street.
Wow, I have Tmobile here in the states and I didnt even know about this. I will have to check in on this.