iPhone UK: Orange and T-Mobile merge in Apple power play

France Telecom and Deutsche Telekom have announced plans to combine their UK Orange and T-Mobile operations, part of a dash to convince Apple to grant the operators rights to distribute the iPhone.

T-Mobile and Orange hope their merger to create Britain’s largest mobile phone network will enable them to win the rights to the handset. The combination beats Apple’s current iPhone partner, O2, into becoming the UK’s second network.

We also understand the O2 iPhone tie-up is under review, with some summer reports claiming the exclusive arrangement’s set to fall apart in early October.

Tom Alexander, Orange’s UK chief executive, told The Telegraph: “We [Orange] are already the network of choice for multimedia devices, we’ve already got the biggest 3G network (which is used to deliver mobile phone broadband), now with T-Mobile we’ve got an even stronger 3G network.”

He added: “We’ve got a fantastic platform and are obviously the network of choice for all multimedia devices, including potential the iPhone in future.”

Gervais Pellissier, finance director of Orange’s parent company France Telecom, said: “We [France Telecom and T-Mobile’s parent Deutsche Telekom] are both very good partners of Apple in our domestic markets and [the joint venture means] we have a very good chance to be a strong partner here in the UK”.

Dr H. Touré, Secretary-General of the International Telecommunications Union said: “Both T-Mobile and Orange have strong R&D departments, so I see the newly formed operator as one to watch in terms of innovation in the products and services it brings to market. Becoming the largest operator in the UK will benefit customers by allowing the new corporation to offer more choice in mobile services and flexibility in pricing. Emerging markets will also benefit from the R&D investment being made in new technologies.”

The deal is likely to attract scrutiny from EU competition regulators and is not expected to fully complete until 2011, with the companies continuing separate operations until then.

We suspect lots of Orange and T-Mobile customers may be hoping for the chance to get an iPhone on their chosen network, particularly given O2’s various customer complaints has led many potential iPhone owners to lag in making the move.