Merger of Everything Everywhere, T-mobile & Orange - Essay Example

The new company would have 28.4 million subscribers (T-mobile UK, 8 September 2009). Another benefit of the merger would be the improvement of the network coverage but also of the network quality (T-mobile UK, 8 September 2009). According to Gervais Pellissier, the CFO of France Telecom, the merger would help both firms to increase their competitiveness in the UK market, but also ‘to develop new services and technologies’ (T-mobile UK, 8 September 2009). In the long term, the merger would result to the decrease of the firms’ operational costs, at least by ?

445m annually (OFCOM 2010). The merger was set under examination aiming to ensure that it does not violate the British and the European laws on competition. The case was brought before the European Commission, which decided, in the 1st of March 2010, that the merger would be permitted (Orange Newsroom March 2010) since the terms that the European Commission had set were met. In accordance with OFCOM European Commission allowed the merger mostly because of the commitments of the firms in terms of ‘spectrum and network sharing’ (OFCOM 2010). . he specific name was chosen in order to highlight the firm’s potential to offer to its customers ‘instant access to the world around them, to everything everywhere’ (T-mobile UK, 1 July 2010).

In practice, the specific strategy, i.e. the use of a new name for the firm resulting from the merger, can be characterized as rather risky, taking into consideration the similar practices of other competitors in the UK mobile industry, which tend to use their own brands. On the other hand, the customers of the new firm, Everything Everywhere Ltd would have the chance to use the mobile networks of both brands, being significantly benefited compared to the customers of other mobile operators in UK (Meyer 2010).

At this point, it would be necessary to check whether the merger actually benefited Orange and T-mobile. At a first level, it seems that T-mobile has been more benefited from the specific initiative, compared to Orange, which is already well established in the UK market. Indeed, the performance of T-mobile across UK can be characterized as low (BBC News 2010); the merger with Orange would help the firm to improve its market position ‘overnight’ (Shaun Collins in BBC News 2010). After the merger, the position of the two brands in the UK industry is still different; indeed, Orange is still more powerful than T-mobile, with a network of about 17 million subscribers, compared to the 13 million subscribers of T-mobile (Meyer 2010).

Moreover, Virgin mobile offers to its customers the potential to use the network of Orange, when being in areas where the Virgin mobile network is not available (Virgin Mobile 2011, Mandalia 2011). The firm that resulted from the merger, Everything Everywhere Limited has a key share in the UK mobile market, reaching ‘the 28 million