| After the announced merger between France | | | | marketing and distribution costs as well as post roll-out |
| Telecom's UK company Orange and Deutsche | | | | and promotions expenses associated with new |
| Telekom's T-Mobile operations in the UK last April 1st, | | | | products and service launches in any new branding |
| the new company won't be operational until after 18 | | | | strategy. |
| months during which time the two current UK mobile | | | | General Cost Savings: Apart form improved network |
| network operators will complete the needed | | | | operations, a reduced level of staffing in the general |
| groundworks in the transition. Each will continue to | | | | and administrative offices nationwide is expected to |
| operate separately to review their respective branding | | | | eliminate functional redundancies in core and ancillary |
| strategies that should make the transition to the new | | | | operations that can optimize workforce strengths |
| company smoother. | | | | especially in its customer service areas, maintenance |
| Capital and Operating Synergies | | | | and back-office administrative work. |
| The merger between the carriers is expected to | | | | On the capital expenditure side of the merger, a |
| create synergies both in the operations and marketing | | | | rationalized network scale can reveal the right levels of |
| of both companies. Annual operating expenses | | | | capital needed where they are lacking or needs |
| resulting from the synergies won't happen immediately | | | | enhancing with the resulting synergies. An improved |
| and are estimated to run over £445 million starting | | | | large scale capital savings are expected over the first |
| 2014 onwards. | | | | five years following T-Mobile and Orange completing |
| IT and Network: Both companies operate different | | | | the infrastructure integration that would unify the joint |
| GSM and UMTS networks in just about the same | | | | 3G network coverage. |
| markets and geographies which lend easily to large | | | | The potential capital savings have been estimated at |
| scale integration for a more rationalized operating | | | | £620 million on a aggregate basis during the next |
| economies that can lead to significant savings | | | | 2010-2014 before stabilizing at about £100 million |
| especially in antenna site rentals, equipment installation, | | | | annually starting 2015 onwards. |
| operations and maintenance expenses as well as | | | | Net benefits to Consumers |
| office location consolidation. | | | | The savings in Opex and Capex over the next five |
| Marketing and Distribution: The merger will trim down | | | | years is expected to benefit the markets in the |
| redundant sales offices in the same location as well | | | | following areas which otherwise may not be possible |
| the similar product offerings under its GSM and UMTS | | | | without some economies of scale. |
| networks. This should result in substantial savings in | | | | |