Orange and T-Mobile have confirmed that they are planning to merge their UK operations. The two companies have just outlined their vision for the merged company in a conference call hosted by France Telecom Chief Financial Officer Gervais Pellissier, Deutsche Telekom CFO Timotheus Höttges, Tom Alexander, CEO of Orange UK and Richard Moat, CEO of T-Mobile UK. If the merger is approved, the combined network will become the UKs largest, with 28.4 million customers, representing 37% of the UK market.

The companies expect the deal to be completed in the first half of 2010. Up until then, the two brands will continue to operate independently. Once the deal is completed, there will be an 18-month transition phase, during which the two brands will co-exist, while the shareholders decide on the future branding strategy.

The companies say that they will cut costs by streamlining administration, rationalizing the retail network and combining network infrastructure. The combined network will have 20% fewer base stations, and 35% fewer sites. They also predict a 30% reduction in marketing costs. They concede that some job losses are inevitable.
Current Orange CEO Tom Alexander will become the CEO of the merged company, while T-Mobile CEO Richard Moat will take the role of Chief Operating Officer.

“Our ambition is to be number one in network quality of service, number one in efficiencies and economies of scale, and number one for sales and service on the high street, says Alexander. “Most importantly, we want to become number one for customer service, reducing churn by striving to give customers the best customer experience.”