Regulators have cleared the way for Orange and T-Mobile to create Britain’s largest mobile phone operator, putting thousands of jobs at risk.

Analysts estimate that up to 2,000 jobs may be on the line as the companies look to cut £3.5 billion in costs from their merged business.

Neither Tom Alexander, who runs Orange and will become chief executive of the enlarged company, nor Richard Moat, head of T-Mobile in the UK, would comment on how many jobs would be cut.

Mr Alexander said that the company would start to trade as a single entity early next month, at which point the two management teams would formulate a cost-savings strategy.

Back-office staff are likely to bear the brunt of the job losses. Cuts to the enlarged company’s retail staff may be less severe than feared, with both the Orange and T-Mobile brands being maintained for at least 18 months.

Despite expectations that some shops may close in areas where both networks have outlets, Mr Alexander floated the possibility of creating larger stores encompassing the two brands. “Where there are T-Mobile and Orange shops next to each other, it may make more sense to have one bigger store,” he said.

The European Commission yesterday approved the two companies’ plan to merge after the Office of Fair Trading withdrew its request to conduct an in-depth investigation of the deal.

The combined company will have market share of about 37 per cent, with almost 30 million customers, and will knock O2 into second place in the UK and Vodafone into third. “It’s quite a momentous day,” Mr Alexander said.

The two executives dismissed complaints from consumer groups that regulatory scrutiny of the deal, which they announced in September last year, had not been rigorous enough and that the process had been too hasty.

The two companies have had to make concessions to ease regulatory concerns about the impact that the merger will have on competition and have agreed to release a quarter of their combined spectrum, the frequencies used to carry mobile phone signals. The spectrum will be auctioned off next year and transferred to other companies in two tranches in 2013 and 2015.

The spectrum owned by the enlarged company is ideal for mobile broadband access.

 source:timesonline