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back to article Sale talks heat up at T-Mobile UK

Deutsche Telekom is in early talks with three companies to sell off its UK mobile business T-Mobile. The future of Britain's fourth placed mobile firm has been in doubt for some time. In the summer advisers JP Morgan were appointed to find buyers for the firm. Deutsche Telekom is talking to Vodafone, France Telecom and …

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A fraction of the 3G licence cost

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""The source also reckoned that the slight improvement in the economy meant that the price for T-Mobile had also risen from about £3bn in July to nearer £4bn now. Which is still a fraction of what the firm paid for its 3G license.""

According to http://www.ofcom.org.uk/static/archive/spectrumauctions/auction/auction_index.htm

One to One paid £4,003,600,000 for licence D. So when you say £4bn is a fraction of the cost of the 3G licence, that fraction would be something like 0.999? Still a fraction, but only just!

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Competition Commission anyone?

"Deutsche Telekom is talking to Vodafone, France Telecom and Telefonica. An anonymous source told the FT:“If we’re lucky, we could end up with a three-horse race.” "

Vodafone.... France Telecom (owns Orange), Telefonica (owns O2)....

would have thought none of these guys will be allowed to buy it due to competition/monopoly problems

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"strengthen US business"

By buying T-Mobile UK?

How would I stand for being able to opt-out of my contract if someone else took-over without having to payout? Seeing how I've just got a shiny TouchPro2 with T it would be nice if I could run away without having to stick out the 18months contract :D

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Rob
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@Sampler

lol ditto about the TMob and the TP2.

If the buyer announces any changes to your contract/terms then you have a valid reason to cancel without any penalties, any ambiguities in the contract will always be in your favour if taken to court as well.

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Sigh...

...suppose I should start looking at other networks, to see if any of them can match the value of T's Web'n'Walk data package (clue: I'm not hopeful)...

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@Sampler

Aye I'd quite like to know that too (just joined t-mobile with a N97 ( which btw is a lovely phone once you get used to it.... too few reviewers have spent more than a day or two with it)), I'd guess you couldn't as the contract will still exist as a legal document and the purchaser will have to abide by its terms.

If on the other hand, prices change on their plans (and its demonstratably worse off for you) then yes you'd probably be able to leave without any issue

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Re: Sampler and Rob

It can't just be "any change" to the contract. It needs to be a "material" change i.e. one that would effect your service/usage/costs etc in some meaningful way - and not necessarily even to your detriment!

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Contract continuity.

Only a guess, but I'm expecting that existing contracts would be honoured but once renewal time comes up we'll (I'm with T too) have to start on a new contract and price plan.

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Name change?

If it does finally get sold, I think it should change its name because it will no longer have any relationship with the other bits of T-mobile. As it is, I can't seem to reliably get text messages between T-mobile UK and T-mobile USA. You'd think this would be a relatively simple thing to get right, but no, apparently not!!

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Competition

Maybe no problem. Still 4 mobile operators as there was in pre-3G days. And even more MVNOs so the customer has, arguably, even more choice. With the consolidation of networks the actual control of base stations is going to become awfully concentrated anyway and is hence likely to be carefully regulated.

Which leaves not the problem of choice but the creation of one operator with significantly greater market share. I can see them citing number portability and churn rates to demonstrate there is no lock-in (though locked headsets and 24 month contracts might thwart this arguement).

Pity. The logical partner would be Three - consolidate their networks and make a new leader. O2 is OK, Voda could do better but it is Orange who would be squeezed by decent competition. I think that is why FT want to buy. Otherwise well deserved oblivion. And that from a 15 year customer who witnessed the ascent of the greatest mobile company to be more than matched by shoddy management after the FT takeover. Its only their incompetence (I won't mention why) and some of their good CS people that keeps some of my handsets there.

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Good riddance, T-Mobile

Just about the worst network I've been with. Granted, I was on Advantage (worked in the industry), but customer service were always unhelpful, terrible for upgrade deals, etc. I didn't realise how much my T-Mobile phone dropped calls until I switched back to o2 and haven't dropped a call since.

The only good thing was Web'n'Walk - a very good deal, but I would say other networks are getting close to matching that now. T-Mobile relied on it for too long, realised it was losing them money then tried to push people onto crappier contracts instead.

As far as I'm concerned, this can't come soon enough. People can harp on about a loss of competition, but are T-Mobile really competing right now?

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Competition

Many national mobile markets have one large player with 40-50% (normally the major fixed line player and former monopoly), a second player with 20-30%, and one or two smaller players with much smaller shares than that. This large player normally takes advantage of its size and existing business relationships (and the scope of its network) and makes most of the money. The second player usually prices itself a little better than the biggest player (but not that aggressively) and makes cosy profits, and the smaller players compete on price but generally lose out because they lack the reach and resources to compete for the best customers.

Britain is not like this. When BT owned what became O2, they for various reasons failed to gain dominance the way Deutsche Telecom, France Telecom, and Telefonica did in their home markets, which led to the rise of Vodafone. The second round of players (Orange and (then) One2One) did much better than in most markets, and this led to a situation where four players had very similar market shares, at least in terms of the number of customers. (O2 and Vodafone's customers typically spend more so those two companies have higher revenues). Combined with a fifth player with deep pockets, this led to the British market being extremely competitive, which is good for customers but bad for operators.

Three of Britain's networks are owned by foreign former monopoly telcos that are used to being dominant in a situation as described above in their home markets. They find the British market much harder going than when they entered it. Deutsche Telecom has decided it has had enough, and decided to go home.

However, if another of the big three networks were to buy T-Mobile's assets, they would end up with a market share of around 45% of total customers. (By revenues, it would depend on which buyer). This is similar to the share dominant players have in other markets, and the buyer would see this as a chance to turn Britain into the same sort of quasi-oligopolistic market that exists elsewhere in Europe.

Yes, this would reduce competition and make things worse for customers, but the trouble is that Britain would still be more competitive than other European markets, and if they were to block this, European regulators would have to acknowledge that other European markets are not competitive. Acknowledging this would acknowledge that they are useless as regulators and/or that they would have to subsequently do something about other European markets. Which is why they will let any such merger happen.

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Contract changes

I *believe* the getout clause is based around a >10% change in applicable charges...

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@Sampler & Rob

You got Touch Pro 2s from T-Mobile? How?

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export-import

we saw your market on online supply to the test of demand 100 % PRODUCT PACKAGE WITH ALL TYPE ASSORT e.g mobile, eric, ,motola, san song, verison etc we are appreciate and subscribe in quality and quatity as much is available.

thanks

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Is that why T'Mob wants to charge $1.50 a month to get a paper billing statement?

Trying to gin up petty extortionate revenue trickles in order to add some spit polish to whatever balance sheets they append to the 'For Sale' sign? Pathetic.

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