Orange and T-Mobile tie-up faces delays on back of spectrum deal

12 Oct 2009

According to British broadsheet The Guardian, the merger between Orange UK and T-Mobile UK could face a significant regulatory hurdle following the completion of a deal between the government and all five of the UK’s mobile network operators. It is understood that on the back of the government’s meeting with Orange, T-Mobile, O2, Vodafone and Hutchison 3G UK, a deal has been agreed that will impose caps on the amount of spectrum any one operator can own. It is believed that under the agreement neither Vodafone nor O2 will be required to give up any of their assets, but the deal calls for a ‘regulatory remedy’ to prevent a combined Orange and T-Mobile from owning too large a portion of the UK’s spectrum. The Office of Fair Trading (OFT) and Competition Commission are expected to decide the cap placed on the merged company’s frequencies. In return for accepting the capping of spectrum it is believed that the agreement between operators and state will see all five cellcos’ 3G licences extended indefinitely. As a result of this agreement it is likely that there will be an OFT request for regulatory scrutiny of the Orange/T-Mobile deal, causing a possible delay to the proposed tie-up, and following which the two operators may be forced to divest some of their existing spectrum allowance.

United Kingdom, EE, Hutchison 3G UK (Three UK), O2 UK, T-Mobile UK, Vodafone UK