The joint venture set up by European telecoms heavyweights Deutsche Telekom (DT) and France Telecom (FT) for equipment purchases has commenced operations, in a move that is expected to save the pair up to EUR1.3 billion (USD1.9 billion) per annum after three years of implementation. Following approval by the relevant antitrust authorities, the former monopoly operators have combined their procurement activities in the areas of terminal devices and mobile communications networks, as well as in significant portions of their fixed network equipment and service platforms, in a 50:50 Brussels-based joint venture known as BUYIN. In addition, DT and FT intend to launch pilot projects to explore other areas for inclusion in the joint venture at a later stage, including IT infrastructure and further IT areas. A total of around 250 employees will work at the main sites in Paris and Bonn once all positions have been filled. Most of them will come from the procurement units of both companies.
In establishing BUYIN, both corporations intend to improve their competitiveness in procurement and generate sustainable economies of scale and savings for their customers. Under the tie-up, the French partner envisages annualised worldwide savings of around EUR900 million three years after the start of operations, while its German counterpart is looking at savings of more than EUR400 million.