France Telecom/Deutsche Telekom UK operations merger

[m419]

Firstly, i'm very suprised that the merger of Orange Personal Communications Services and T-Mobile UK is going ahead.

Two very different companies with a similar product portfolio but at the same time direct competitors.

The advantage of the merger is that it MAY improve network coverage over time.

The disadvantages of this:

Many Job losses
increased costs to customers
Less choice for customers

Towns which have an Orange shop and a T-Mobile store will loose one of them, product ranges in outsourced stores such as Carphone Warehouse and Phones4U may also drop to save money, 3 have done this by not selling Pay As You Go phones in Carphone Warehouse, you need to use 3Store either online or on the high street or at skype.com

And what will happen to the philipino call centre in use by T-Mobile and the indian call centre used by Orange for Pay As You Go services, the merged company will increase the use of the outsourced call centres to save money and cut costs.

It is likely that the newly merged company which is expected to merge into one brand sometime in early 2011 will be branded as Orange, France Telecom paid a fortune for the brand and i'm sure they will not give it up! Its attractive,bright and distinctive and widely popular around the world, It will also cost the merged company a lot of money to create a new brand, Orange has already spent a fortune on rebranding Freeserve twice, so by using the Orange brand in the future will cut costs.

The company will also be connected to the Virgin Brand as it will be providing Virgin Media with its network for Virgin Mobile customers.

In time, Orange or the new merged company will eventually phase out its 2G product range and provide a similar service as 3, being completely 3G. This is one of the reasons why the networks are merging.

There is a question of how the networks will work with this merger, Hutchison 3G and T-Mobile 3G have already merged there 3G infrastructure, the orange 3G Network will join with this, this is actually good news for those having network coverage problems on the 3,T-Mobile and Orange 3G networks. It will eventually provide the UK with nearly 100% coverage and stronger coverage.

Hutchison 3G have already launched an advertising campaign reagarding its 3G network coverage, mentioning that its coverage should be much better come next year.

The only problem with 3 is that 3G signals don't travel as far as 2G signals and as 3 is only 3G, this is the reason why some people especially in houses with very thick walls or people living basement flats may experience poor 3G coverage, this is a problem with all 3G networks and the only solution to this is more masts.

[Ignitionnet]

Why would costs increase given that the combined group will still have competition from Vodafone, O2, 3 and a number of MVNOs?

It will certainly improve coverage for customers of both, no 'may' about it, in addition it will provide considerable efficiency and cost savings on network and potentially superior mobile broadband services, with cutting the number of cell towers backhaul from the remaining ones can be increased more easily. Some of these costs may be passed back to us in lower tariffs, and certainly we'll see better quality 3G / mobile broadband services thanks to statistical multiplexing from larger cell tower backhauls.

Your remark about what will happen to the existing outsourced call centres confuses me. If the two both already outsource what extra is there to outsource, and if increased outsourcing to cut costs were on the agenda why hasn't it already been done?

There's nothing objectionable about this merger at all, the UK market remains competitive with multiple operators offering competing services.

Your remarks regarding phasing out of 2G in favour of 3G are poorly informed. Yes 2G will be going, and that nice low attenuation spectrum will have 3G services going across it. The range issues are not a problem with 3G, they are a problem with the frequencies it presently operates in, these being much higher frequencies than the 2G networks and therefore more prone to attenuation. Simple physics, higher frequency equals smaller wavelength equals more attenuation across a given distance through a given material as the wave is more compressed. The 'only solution' is not more masts it's to deploy 3G at lower frequencies... such as those Ofcom will be selling off very shortly as part of the digital switch off and those presently used for GSM.

Who cares what the merged company brands into? Won't affect the service being provided. Virgin Media doesn't magically mean better services than ntl:Telewest - it's just a name, a brand identity and a way to spam us with red painted rubbish. Chances are extremely high it will retain the name 'Orange' simply because Orange is a more recognised name in the UK than T-Mobile.

Your post appears to be an attempt to find faults with the merger because you disagree with it, apart from job losses from overlap between the two in the UK in terms of retail outlets, IT, etc, I'm not actually sure there are any and certainly not enough for the proposal to be given a second thought by regulators.