T-Mobile and Orange Merger - Many Questions Yet to Be Answered
The analysts studying the merger of France Telecom’s Orange and Deutsche Telecom’s T-Mobile in the UK are unable to predict the ultimate result of the merger with certainty. The analysts are sure that the merger will create the UK’s largest mobile operator and thus have a huge effect on the mobile market industry, but they are unclear about the precise outcome. Abigail Browne, senior analyst at Informa Telecoms & Media, was of the view that the merged entity will require some time to strengthen its foundations. Competitors like Vodafone and O2 (click for more on O2 broadband). can utilise this time to establish themselves better in the market. The merged entity will have significant purchasing power and hence once it finds its ground it will be difficult for the other brands to face the competition.
Some vital but yet-to-be-answered questions about the new entity are related to the sales and marketing strategy to be followed by it. It is also not known which brand will dissipate and which will continue after the eighteen-month period till which the brands will keep their own identity. Referring to the risks involved in such a colossal task, John Delaney, research director for European consumer mobile at IT and telecoms analyst company IDC, added that whether the new entity will emphasise on telecom-centric marketing like T-Mobile or will follow multimedia content/services and handset-branding approach like Orange is yet to be decided. Again, the success of the new brand is inevitable, but immense short-term marketing costs and other important issues are to be sorted out, and that is exactly what the executive teams of the two companies are doing.
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