Deutsche Telekom, France Telecom joint venture begins operations

Deutsche Telekom (Bonn, Germany) and France Telecom-Orange (Paris, France) announced that following approval by the relevant anti-trust authorities, BUYIN will start business operations on Monday as a Brussels-based procurement joint venture between the two companies.

The company, which also has operational units in France and Germany, is headed by Volker Pyrtek, previously Chief Procurement Officer at Deutsche Telekom.

The parent companies have pooled their procurement activities in the areas of terminal devices, mobile communications networks, and in significant portions of their fixed-network equipment and service platforms in an equal joint venture, according to the two companies.

In addition, the two companies 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, according to Deutsche Telekom and Orange. The inclusion of additional fixed-network components will be looked at by the German Federal Cartel Office.

The joint venture is expected to generate an annual run-rate of procurement savings of $1.8 billion after three years of implementation.

According to both companies, in establishing BUYIN, they intend to improve their competitiveness in procurement and generate sustainable economies of scale and savings for customers.

The worldwide savings for Deutsche Telekom and France Télécom-Orange three years after the start of operations are targeted at above $550 million per year and below $1.2 billion per year respectively.

A total of around 250 employees will work at the main sites in Paris and Bonn, most of which will come from the procurement units of both companies, says Deutsche Telekom and Orange.

The partners announced the formation of a procurement joint venture in London in mid-April 2011. The two companies had already announced at the end of February that they intended to look at possibilities for cooperation in various technological areas. In addition to the joint use of radio access networks in Europe, WiFi roaming and machine-to-machine (M2M) services, where a cooperation between Deutsche Telekom, France Télécom-Orange and TeliaSonera has already been announced, additional possibilities for cooperation in other growth areas will also be examined, according to both companies.

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