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Major Concerns Expressed By Analysts Regarding T-Mobile/Orange Merger

22 September 2009

Responding to the news regarding the merger of the UK operations of France Telecom and Deutsche Telekom, analysts like Analysys Mason have stated that this merger will not be as smooth and simple as it seems.

Analysts clearly state that the regulatory authorities in the telecommunications industry will not approve of such a merger, as it will have the potential to reduce competition effectively in the UK limiting the choice we have to compare broadband prices and lead to monopoly. They further say that if the controlling authorities decide to approve of such a merger, then they will impose strict conditions on the new company, such as responsibility of ensuring augmented broadband service in rural areas.

Pitted as the biggest merger of all times, the present union between the two operators is expected to give birth to a company that will outdo all other major players in the mobile industry, including O2 and Vodafone, to become the largest mobile service provider in the country. This, according to analysts, will definitely attract the attention of the controlling bodies.

Mergers between major players in the industry are very common these days, with Austria going down to four players from its existing five and the Netherlands down to three from its existing five. Whilst it is natural and obvious that such mergers will happen even in the UK, analysts feel that controlling bodies in the UK will not permit giants like O2 and Vodafone to merge.

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