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Well, its official. T-Mobile (the company I have business mobile contracts for a few businesses I am involved with) and Orange have decided to merge operations within the UK.

T-Mobile has had the "For Sale" sign on its UK operation for a few months now to reduce debt at the parent company - Deutsche Telekom. Both O2 and Vodafone had shown some interest based on media speculation but in the end they have opted for a deal which will see a new company in the UK created - the name of which has not yet been announced (although The Register appear to like T-Orange) - and both Deutsche Telekom and France Telecom (Orange UK's parent company) getting a 50% stake each. Both the T-Mobile and Orange brands will stay for at least 18 months but after that we will most likely see these phased out and replaced with a single new name. During the next 18 months, through, back office staff will be merged within the company with the aim of cost cutting and removing duplication.

The new operator will have about 37% of the UK market in terms of number of customers which will mean the deal will have questions asked by UK and EU level competition authorities but considering other mergers that have been allowed through in the current economic climate, hopefully it will go through on the nod.

It is in terms of the network that interests me. T-Mobile previously had a radio network sharing agreement with Three with both their 3G networks being managed by a company called MBNL (Mobile Broadband Networks Limited) they setup. From what various news sites are reporting, this agreement will stay in place as Three's board have already been "sounded out" during negotiations. Because of the fact that T-Mobile and Orange will want to merge their networks as fast as possible to improve coverage, improve speeds and cut costs, this will mean that the networks of T-Mobile, Orange and Three (or over 50% of mobile customers in the UK to put it another way) will all run on the same equipment. This will allow them to cut costs and use some of the saved costs to increase coverage and speed much faster than their rivels (O2 and Vodafone).

The first stage of the merge, happening some time next year, is apparently going to be the ability for T-Mobile customers to roam onto Orange's network and Orange customers to roam onto T-Mobile's network. I am often in an area that only gets signal from one network - Orange - so this will be handy for me. The next stage will be to actually start cutting duplication of cell sites and moving the equipment to areas without signal or with poor signal.

One thing that will be interesting to see is what happens when 4G comes along. The technology that will be adopted will be Long Term Evolution Advanced which basically is a full IP based network allowing 1gbps at up to 125 miles making the current 4.5mbps (which is shared between all users on that cell site so you often only get 1mbps) offered by UK networks tiny. 4G is also backwards compatible meaning that you only need a 4G cell site and it will provide both 2G and 3G coverage so you don't have to have a cell site for each like you do now.

4G will likely be deployed on 800mhz spectrum that is currently used for analogue television broadcast. This will be totally freed up once digital switchover completes in 2012 with the auction taking place in 2011 according to OFCOM. O2 and Vodafone won't be allowed to bid in this auction. That is because they were first on the market and given 900mhz spectrum. When T-Mobile and Orange came along, the lowest left was 1800mhz spectrum. As you may know, lower spectrum travels further and penetrates objects better meaning not as many cell sites are needed.

All in all, it will be interesting to see what happens over the next 3-4 years but really, considering we will likely soon have T-Mobile, Orange and Three running on the same radio network, it would be nice to see O2 and Vodafone join the mix. More could maybe be then spend on creating near 100% land coverage rather than just near 100% population coverage as we have now...

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I am a technology enthusiast living up in Carlisle, Cumbria in the UK and am the managing director of Its Elixir which sells Henna Hair Care Products and Ear Candles, Craig Brass Systems which creates and custom develops quality software and LonsdaleNET which delivers high speed wireless and fibre optic broadband in Cumbria.