updated 08:20 am EDT, Mon April 18, 2011
Orange and T-Mobile parents back joint venture
Orange's parent company France Telecom and T-Mobile's equivalent Deutsche Telekom on Monday confirmed their rumored joint venture. The deal will see the two combine their activities for buying phones, network hardware, and other parts core to their cellphone businesses. The two hoped both to get economies of scale and expected to save the equivalent of $1.86 billion over the course of the first three years.
The two explained it as a way of managing the flood of mobile data use as smartphones took hold. A deal would also help "reduce the digital divide" between those who can and can't get access, Deutsche Telekom CTO Edward Kozel said.
Both expected to formally sign the deal win the next few weeks. Once approved, the deal would see staff from both companies go to each other's respective offices in Bonn and Paris.
A completed deal could significantly alter how phones spread in Europe. Agreements to bring phones or upgrades to 3G and 4G to one network could quickly translate to the other with minimal effort. It may lead to exclusives or important deals coming more easily as well as more advanced roaming deals.