[getti]

Reports online tonight with sites like FT and Reuters that the EU are going to approve the merger of T-Mobile and Orange as early as next week after a deal to allow 3 to have 3,000 more masts and cut 25% of the overall spectrum was rumored


LONDON (Reuters) - European regulators are set to approve a plan to combine France Telecom's Orange (FTE.PA) and Deutsche Telekom's T-Mobile (DTEGn.DE) as early as this week, creating Britain's largest mobile operator, newspapers reported.

The Sunday Telegraph and the Sunday Times said the European Commission had agreed to fast track the merger after overcoming the concerns of Britain's Office of Fair Trading (OFT) and industry regulator Ofcom.

The Telegraph said after concessions from the two operators, including the offer to release some radio spectrum in the United Kingdom, both the OFT and Ofcom had signalled to the Commission they would not push for a UK-based inquiry.

The Telegraph quoted sources familiar with the matter as saying the Commission could decide as early as this week that no further investigation was required.

Orange and T-Mobile agreed last year to form a 50-50 joint venture in the UK that would give them a leading market share of about 37 percent, while reducing the number of mobile phone operators in the country to four from five.

The Commission has until March 1 to decide whether to pass the inquiry back to UK regulators.

T-Mobile and Orange declined to comment on Sunday.

A Commission spokesman also declined to comment.

[Ben]

So they'd end the share agreement with 3 UK but transfer to them some ~3000 masts that, one assumes, would overlap in a T-Orange network anyway? That sounds interesting. As does giving up a large chunk of spectrum.

I'm sure O2 and Vodafone would gladly back down and welcome this through if T-Orange would agree they get to keep their 900MHz and put 3G in it ;)

[DBMandrake]

The way I interpret it from this article:

http://mobilenewscwp.co.uk/News/420641/ec_approves_orangetmobile_jv.html

is that part of the deal was that the joint venture with 3 to share 13,000 masts by October this year (currently at about 10,000) is to be continued with the new merged operator, and also offer them access to an additional 3000 sites. (presumably sites which are currently Orange sites where there is poor T-Mobile and 3 coverage now, which would not have received better coverage under the previous 3 - T-Mobile only sharing deal)

If this is true this is a real coup for 3 as they were on very shaky ground previously, and risked losing a lot of investment and sites if the new merged operator pulled out of the site share. But it now seems that at the very least their 13,000 site sharing agreement is safe, and they may even be an extra 3000 sites better off - assuming they can find the money to finance an additional 3000 site consolidations..(My guess is they will stick to their target of 13,000 by October, and maybe roll out additional sites after that depending on finances...)

One other thing I can't help but wonder, is what this does to 3's 2G roaming deal with Orange ? Currently they share 3G network infrastructure with T-Mobile, (but not 2G) while they have a roaming agreement with Orange for 2G. (But being roaming, it is not a seamless switch between 3G and 2G, and works like international roaming but minus the extra charges to end users...)

Under the new merged T-Orange 3 will effectively be getting those two services from the same company - so does it make sense to continue having a 2G "roaming" agreement with T-Orange, or once the T-Mobile and Orange networks are fully merged, does it make sense for 3 to simply gain access to T-Orange's 2G network (for a cost of course) in such a way that it is seamless in call 2G/3G switching (like all other networks) rather than roaming - the archillies heel of 3 at the moment...

[Ben]

Nice, thanks.

I suppose there's a third option wrt the roaming; perhaps 3 UK will cease provisioning 2G roaming for new customers and become the UKs first 'pure' 3G network experience.

[DBMandrake]

I really hope they don't take your third option - even with 13,000 or 16,000 sites, an all 3G network on 2100Mhz will just have too many dead spots out in the country (due to less than half the range of 2G) and deep inside city buildings. (Due to far worse solid object penetration)

(Just compare 3's coverage checker in the Scottish Highlands for example - wide coverage on 2G, non-existent in large swaths of the country on 3G despite having the most 3G coverage of the operators by population...)

Although there is no doubt I get 3G in more places from 3 than any of the other networks, there are still many places (mostly deep inside department store buildings or shopping complexes which don't have operator micro-cells) where I rely on 2G fall-back. (To be fair I usually only get 2G from the other networks in those same places)

Unless they roll out nationwide 900/850Mhz 3G first, (and preferably 850Mhz from the point of view of an iPhone user ;) ) if they did decide to switch off 2G fall-back I would leave them straight away, probably for Orange / T-Orange.

Although I can put up with a delay in roaming from 3G to 2G when going into a bad 3G area, or even the odd dropped call while that happens (as long as I can call right back again once it's on 2G) I can't put up with large numbers of places where I would get no signal at all.

[Ben]

The OFT has stepped in as expected, which should prevent a deal going through any time soon.

http://www.theregister.co.uk/2010/02/22/oft_t_orange/

For better or for worse.

[DBMandrake]

Huh ? Two completely contradictory stories posted on the same day, the source I posted says:

"Ofcom and the Office of Fair Trading (OFT) are not to press for further investigation of the proposed merger of Orange and T-Mobile in the UK after the operators agreed to make allowances to rival firms in exchange for a swift resolution to regulatory and competition obstacles."

and

"The Sunday Times and The Sunday Telegraph reported Ofcom and the OFT have advised the European Commission (EC) they will not pursue the matter any further, and that the EC could see fit to fast-track approval for the joint venture as soon as this week."

and The Register says:

"The Office of Fair Trading has requested control of the investigation into the merger of T-Mobile and Orange, making a quick decision unlikely and delighting the competition."

Yet another angle comes from The Sunday Times, a day earlier:

http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/7288346/Orange-T-Mobile-merger-to-get-go-ahead.html

"The European Commission is understood to be planning to reject an appeal from the Office of Fair Trading (OFT) for the inquiry to be passed back to the UK regulator.

It is understood that the commission has made its decision but has not yet informed the OFT, which fears the merger will "significantly" reduce competition. The commission made its decision after receiving assurances from Orange, which was the main sponsor of last night's Baftas, and T-Mobile that they would safeguard the future of 3, the UK's smallest mobile phone operator. Over the weekend, Orange and T-Mobile, agreed to extend a network sharing deal with 3 to 16,000 mast sites across the UK."

Crazy stuff. Either reporters are not fact checking, OFT has changed their mind today, or people are just jumping to conclusions based on preliminary findings....with due respect to the Register, it looks like they've seized upon out of date information.

[Ben]

Will be very interesting to see how this one plays out! :)

[The Mullet of G]

I think the OFT should slap this nonsense down, why should two companies that totally blow be allowed to become the single biggest player in the market, neither of them have earned that position nor deserve it.

[Ben]

I've had very mixed thoughts on the deal since the news first broke... I think there are a lot of pros and cons and also that the impact on the market will be significant; hence why the OFT should be investigating this rather than some fast-track EC ruling being the decider.

Ultimately, though, the last thing the UK market needs is further paralysis. We need spectrum reform, and fast, and it's hard to see how that'll happen with this massive anvil hanging over everyone.