With the lawyers having agreed the details, T-Mobile UK and Orange UK have formally merged and become a single UK entity, with Orange UK's boss, Tom Alexander, being named CEO of the new company and T-Mobile UK boss, Richard Moat, appointed at CFO.
The UK businesses of the two organisations will now be able to share confidential financial and customer information and begin consolidating the two businesses.
However, the hard work starts now with the new company expected to find cost savings of over €700 million in operational costs from 2014 which will be dependent on up to €1.3 billion in integration costs over the period from 2010 to 2014. Those costs would primarily relate to the decommissioning of mobile sites, the rationalisation of the network of retail stores and the streamlining of operations.
The new company is also expected to find large scale Capex savings over the next five years, resulting from the integration and unification of the networks and from jointly expanding 3G coverage. Internal bean-counters believe there is the potential for Capex savings (net of integration Capex), of around €1 billion on a cumulative basis over 2010-2014, prior to stabilising at approximately €110 million a year from 2015 onwards.
A board of six directors includes Alexander and Moat. Others include Tim Höttges, CFO of Deutsche Telekom, who takes position as non-executive chairman for two years. After this time, the leadership will rotate to Gervais Pellissier, France Telecom deputy CEO and CFO, for two years.
How long Moat will want to stay around as No. 2--with CFOs Höttges and Pellissier looking over his shoulder as he attempts to hack costs out of the merged company, will be watched with huge interest.
No new brand name has yet been made public, although memos firmly suggesting TOM (T-Mobile Orange Mobile) were said to be circulating internally. Mobile News revealed that the new TOM brand would be rolled out across the UK in a multi-million pound ad campaign fronted by singing sex symbol Tom Jones belting out his hits to reinforce the theme "The Power of Tom." The story was published on 1st April.
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