Sharifah Amirah. Principal Analyst at Frost & Sullivan, commenting on talk of a planned buy out of T-Mobile UK by Vodafone said, “During Frost & Sullivan’s 2009 telecoms outlook briefing at the beginning of this year we had discussed consolidation in the mobile sector. With a current mobile subscriber base of close to 80 million in the UK, 5 MNOs are at least one too many.
While the joining of two dominant players may raise regulatory concerns, particularly given the high market shares of both players i.e. 20 and 25% each, the bid in itself provides positive inertia for consolidation in a crowded market.
Synergy wise, the takeover will enable Vodafone to grow their pre-paid based by more than 100% and a leading position in Mobile Broadband. Another plus point is that the combined entity will then have spectrum availability on both the 900 MHz and1800 MHz blocks. This can be seen as a further regulatory concern. On the flip side though, if 02 and Orange combine forces Ofcom’s spectrum ordeal might come to an end – depending of course on what happens to Three.
Should the deal go through, conflicting management styles and overlapping operational focus will be two primary areas to address. Both companies’ share prices peaked slightly in the morning rally but has since stabilised. A positive signal one could say.”