Jobs at risk over Orange merger

Orange / T-Mobile merger

The European Commission approved the merger of Orange and T-Mobile yesterday after the Office of Fair Trading withdrew its request to conduct an in-depth investigation of the deal.

The combined company will have market share of about 37 percent, with almost 30 million customers, pushing O2 into second place in the UK and Vodafone into third.

Now that the path has been cleared for the merger to create Britain's biggest mobile phone operator, comes the worry of thousands of job losses. As the merged company looks to cut costs of GBP£3.5 billion, analysts are predicting that it could mean the loss of up to 2000 jobs.

Currently, neither Tom Alexander, who runs Orange and will become chief executive of the enlarged company, nor Richard Moat, head of T-Mobile in the UK, will comment on the prospect of job losses.

Mr. Alexander said that the company would start to trade as a single entity early next month, at which point the two management teams would formulate a cost-savings strategy, The Times reports.

Facing job losses

It's being feared that the majority of job losses will be felt by back-office staff, while retail staff may be less drastic than originally feared due to both the Orange and T-Mobile brands being maintained for at least 18 months. Despite predictions that some shops may close in areas where both networks have outlets, Mr. Alexander floated the possibility of creating larger stores encompassing the two brands. "Where there are T-Mobile and Orange shops next to each other, it may make more sense to have one bigger store," he said.

The merger has been granted on the terms that steps are taken to protect the UK's smallest network operator, 3. The group must also sell off a quarter of its spectrum on the 1800 MHz band, one of three frequency bands currently used by UK mobile providers.

The new telecoms giant would control 84 percent is this bandwidth, which is part of the radio spectrum used for web surfing on mobile phones and is crucial to the government's plans for the country's future technological development, the BBC reports.

The Commission said France Telecom - owner of Orange - and Deutsche Telekom - owner of T-Mobile - could merge their UK units if they agreed to amend "an existing network sharing agreement" with 3 "to ensure that there remain sufficient competitors in the market."

Jodie Humphries

Jodie Humphries graduated from Bath Spa University with a BA Hons in Creative Writing in 2008. She has worked for GDS Publishing for the digital group since July 2009. She has previous experience with writing for the web, running her own website since April 2007.

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