Orange, T-Mobile tie up as "Everything Everywhere"

LONDON (Reuters) - The merged British arms of France Telecom and Deutsche Telekom will keep the Orange and T-Mobile brands, uniting 30 million customers under the umbrella of a holding company called Everything Everywhere.

The brands, which together will overtake O2 and Vodafone in British customer numbers, were “household names,” said Everything Everywhere Chief Executive Tom Alexander, and “you don’t do anything rash with those valuable assets lightly.”

Analysts had speculated that one brand, most likely T-Mobile, would be wound down in Britain as part of a drive to cut costs.

Alexander, however, told reporters on Tuesday that the two brands represented different personalities, with 17-million customer-strong Orange, having a “premium element,” whereas T-Mobile had a “straightforward, value-orientated” proposition for its 13 million subscribers.

Shares in Deutsche Telekom were 0.7 percent down at 12.04 p.m. British time, while France Telecom was 2.1 percent down, both outperforming a 3.0 percent weaker Stoxx European telecom index.

Steven Day, the company’s VP of brands and communications, said the group had taken a lead from companies such as Volkswagen and TUI Travel in operating multiple brand strategies.

“Brands can operate simultaneously, side by side, and appeal to different segments of the market,” he said.

Alexander said the new group had the scale to build a network with the capacity and capability to support bandwidth-hungry smartphones, and the geographical reach to give customers a better experience than its competitors.

Its customers would be able to roam across both networks from later this year, he said.

The German and French companies said in November the 50:50 joint venture would give them a market share of about 37 percent in Britain, putting them ahead of current market leaders O2, owned by Spain’s Telefonica, and Vodafone.

The combined group would have more than 700 shops in British high streets, Alexander said, and it was planning more, including additional concessions in HMV stores.

He reiterated that the merger would result in synergy savings of 3.5 billion pounds, or 4 billion euros, and there would be job cuts in back-office functions, but did not specify how many.

Editing by Mark Potter, Mike Nesbit