The proposal of T-Mobile and Orange to merge and form a new entity called T-Orange has met with resistance from both the Office of Fair Trading (OFT) and local consumer groups. The OFT is concerned that small players like 3 would stand no chance of competing against a giant like T-Orange.

The proposal which was sent in September 2009 to the European Commission in Brussels is at present waiting for approval by the body. Both Orange and T-Mobile are hoping for a favourable decision as it would then make the new entity, T-Orange, a dominant player in the mobile industry from its inception (click here for latest Orange Broadband deals).

The OFT, voicing its concerns over the impact the merger will have on the businesses of small players like 3, has called for UK’s regulatory authorities to look into the details of the merger proposal. In addition, many people fear that Brussels may not be aware of the implications and hazards that may arise by the merger, if it comes through, especially with regard to the huge market share the merged entity will automatically get, as also the massive spectrum allocation.

Consumer groups in the UK are against the merger fearing that the new entity, by virtue of being the most dominant player in the market, would arbitrarily raise prices and also stifle the competition.

In view of all the reservations shown against the merger it is unlikely that the proposal will be passed at an early date.

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