Orange sees more T-Mobile mergers as unlikely

France Telecom (Paris, France) is unlikely to merge its mobile operations with those of Deutsche Telekom (Bonn, Germany) in other markets in the way it has done in Britain, the head of its European operations said on Wednesday.

But the French carrier is keen for more network-sharing deals to cut costs, following agreements with Deutsche Telekom’s T-Mobile in Poland, Austria and Romania and with Vodafone in Spain.


France Telecom (Paris, France) is unlikely to merge its mobile operations with those of Deutsche Telekom (Bonn, Germany) in other markets in the way it has done in Britain, the head of its European operations said on Wednesday.

But the French carrier is keen for more network-sharing deals to cut costs, following agreements with Deutsche Telekom’s T-Mobile in Poland, Austria and Romania and with Vodafone in Spain.

“Network sharing, yes. The Everything Everywhere model is unlikely,” said Olaf Swantee, executive vice president of operations in Europe, referring to the Orange-T-Mobile British joint venture formed in 2009.

“In all our markets we are open to looking at selective network-sharing agreements.”

Speculation has repeatedly surfaced about a full merger between the French and German ex-telecoms monopolies, fueled by an increasing urgency to spread the costs of investing in networks as devices and mobile services become more demanding.

France Telecom is investing $27.1 billion between now and 2013 as mobile data traffic doubles each year with smartphones like the Apple iPhone.

To help compensate for the higher spending and help it maintain its generous dividend policy, France Telecom is setting up a joint purchasing agreement with Deutsche Telekom aimed at saving $4.4 billion between now and 2015.

Currently, the two companies are planning joint procurement in the standardized areas of network components, customer equipment, internal IT and service platforms. The agreement does not currently cover investments in brand, marketing and local costs like maintenance.

“There is a possibility to widen the scope,” Swantee said. “Definitely, over time.” But he added it was difficult to predict until some progress had been made.

(Editing by David Cowell)