Mobile Phones – Orange & T-Mobile Merger Delayed by Investigation
This week the Office of Trading (OFT) has encouraged the European Commission to investigate the potential merger as it had the probability of significantly reducing the competition in the UK mobile market.
Both and Orange and T-Mobile had initially hoped to complete the amalgamation by the end of this month but mobile phones analysts predict that the true extent of this review could see it put back to as late as December.
Although both companies have revealed that they feel the merger will be good for the industry, James Barford of Enders Analysis believes both companies will have to be prepared to make sacrifices to make the move work.
He said: Our view remains that the Competition Commission investigation is probably going to result in the merged company having to make very significant concessions, with the not insignificant chance of an outright ban.
Consumer groups were also defiant in their stance that serious consideration needed to be made from the European Commission before sanctioning the switch that could have a major impact on competitors.
Peter Vicary-Smith, chief executive of Which? said: "It’s only right that a deal affecting UK consumers should be scrutinised by UK regulators. This merger will clearly have a huge impact on the mobile market, since it will form the biggest mobile operator in the UK and bring the number of networks down to just four."
As yet there are no indications of potential new handsets and mobile phone accessories from the potential amalgamation and the longer this protracted switch drags on the more it will play into the hands of competitors who are continuing to develop the latest smartphones and applications.
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