Orange and T-Mobile join networks and cut jobs

Orange and T-Mobile join networks and cut jobs

Orange and T-Mobile have enabled interconnection for their users to pick up both networks as their joint venture develops to become more beneficial to customers.

The terms of the joint venture will enable the two companies to operate as separate brands but be held under one holding company, named Everything Everywhere. Customers are now able to update their SIM cards to pick up the network they are not subscribed to if their original connection fails.

“This switch-on is the culmination of a unique and hugely complex technical project,” said Tom Alexander, chief executive of Everything Everywhere. “The result is simple; our customers, up to 27 million consumers, get two networks for the price of one.”

Everything Everywhere has been promoting the concept of “smart compete”, with T-Mobile targeting value-focussed users and Orange focussed on premium users. The company’s leadership team will instigate a brand strategy review in September 2011. Research group Ovum suggests that one brand could eventually be preferred to another, considering comments made by Alexander that the cost of a potential rebrand could be minimised.

“It is more likely that the joint venture will be dominated by France Telecom and Orange. A number of services have been targeted for future growth, with Orange prominent in most of these,” said Mark Giles, analyst at Ovum. “Finding and implementing clear differentiation between each brand’s customers will be difficult in practice – and that’s without factoring in 3 UK and a variety of MVNOs which will also be served by the shared network.”

Everything Everywhere plans to cut up to 1,200 jobs from Orange and TMobile’s combined 16,000 UK workforce to avoid duplication of roles in legal, HR and finance. All cuts are to be finalised before the end of the year and will be determined after a 90-day assessment programme, as the company undergoes restructuring and looks for savings of up to £3.5 billion to enable competition with Telefonica’s O2 and Vodafone. Orange integrated its network in August with the Mobile Broadband Network Limited (MBNL) – a joint network deal owned by 3 UK and T-Mobile.