European giants begin joint procurement venture

France Telecom-Orange and Deutsche Telekom have today begun the operations of their procurement joint venture based in Brussels.

The move, which was announced in April of this year, will see the two European leaders merge procurement activities in the areas of terminal devices, mobile communications networks, and in significant portions of their fixed-network equipment and service platforms. The companies believe that after three years of implementation, the joint venture will generate annual procurement savings of €1.3 billion.

Known as BUYIN, the joint venture will be overseen by Volker Pyrtek, who previously served as chief procurement officer at Deutsche Telekom, and it will also have operational units in both France and Germany.

Deutsche Telekom’s chief technology and innovation officer, Edward Kozel, said the company was pleased to have received approval from appropriate anti-trust authorities to proceed with the joint venture.

“Now we can start working together to tap into the large and growing potential savings from joint procurement,” he added.

The two companies will in the future look to launch pilot projects exploring other areas for inclusion in the joint venture, namely IT infrastructure. BUYIN is expected to generate “sustainable economies of scale and savings” for customers, as well as helping suppliers by standardising equipment used by the European network operators.

Approximately 250 employees, mainly from the procurement units of both companies, will be stationed in the company’s main sites in Paris and Bonn.

“I am very happy that we have been able to put this new project with Deutsche Telekom into action so quickly. The teams from the two companies have worked intensively with each other and put together a good agreement that has also won the approval of the anti-trust bodies," said Pierre Louette, executive vice president and group general secretary at France Télécom-Orange.

The joint venture symbolises the growing collaboration between European telcos. Along with Swedish operator TeliaSonera, the two companies have already been involved in a co-operation agreement to increase the service quality and interoperability of machine-to-machine (M2M) communications. For more information click here.

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