Carphone nod for new JV supplier

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Carphone Warehouse welcomed the proposed merger of Orange and T-Mobile, representing two fifths of its chief network suppliers, as good for innovation within the consumer market.

Carphone chief Andrew Harrison (pictured) said: “The UK is probably the most dynamic and competitive market in the world. 

“The improved economics for the new Orange/T-Mobile business should create real opportunities to invest in service and propositions, without on the face of it, impacting on consumer choice – seems a very positive outcome.”

Orange and T-Mobile were non-committal on whether volumes of business via the indirect channels, and through Carphone Warehouse and Phones 4U specifically, would be affected as a result of the merger of the UK’s number three and four network suppliers.

Orange chief executive Tom Alexander stated the joint venture would save £50 million per annum through the realignment of all its sales channels.

Timotheus Höttges, chief financial officer of Deutsche Telekom, said: “We are not going to talk now about the indirect channel; that will be addressed in discussions between us and our retail partners. But something is very clear and that is that we will have a stronger footprint in the UK as a combined entity than either of us had before.”

Alexander added: “We are looking at savings from distribution, but the new operation will make our products and services more attractive to the consumer, and more attractive for the indirect channels to sell.”

Other of the main protagonists on the UK high street were less forthcoming.

3, which is heavily involved in a 50/50 joint venture already with T-Mobile over network sharing, said it was watching closely, but brought the issue back to its campaigning questions of mobile termination rates and regulatory reform.

A 3 spokesperson said: “We look forward to seeing how the negotiations develop. Our network infrastructure joint venture with T-Mobile inevitably makes us an interested party.

“The prospect of fewer operators highlights the need for clear action on consumer competition issues such as mobile termination rates and mobile number porting.”

T-Mobile UK chief executive Richard Moat stated 3 UK was “highly supportive” of the move. Moat said: “[3 parent] Hutchison is very supportive of this deal and wants the three parties to work together for maximum mutual benefit.”

Virgin Mobile, which rents wholesale airtime off T-Mobile to run its MVNO, has also given the venture the thumbs up, according to Moat.

Meanwhile, Vodafone refused to comment outright and O2 stated simply: “We will watch developments with interest. Meanwhile our focus is business as usual. Giving O2 customers a great experience remains our key priority.”

A spokesperson for Phones 4U said: “It’s not really appropriate for us to comment. What we can say is that we have a great relationship with our network partners, and it is business as usual at Phones 4U.”

 

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