18 April 2011 | Angeline Albert
FranceTelecom-Orange and Deutsche Telekom have agreed to combine purchasing activities
to save €1.3 billion (£1.1 billion) after three years.
A 50/50 joint venture between the brand owner of Orange and brand owner of T-Mobile will combine
the companies’ procurement of customer and network equipment, service platforms
and IT infrastructure.
two groups signed a non-binding agreement with the final accord expected to be
signed in the next few weeks, subject to company board approvals and antitrust
clearance. The joint venture will be
established in the final three months of this year.
of scale and the harmonisation of technology is expected to result in €1.3
billion combined savings.
The move is the result of talks between the two
companies to identify potential areas of cooperation in radio access network
sharing in Europe, Wi-Fi roaming and equipment harmonisation.
“Operators are expected to invest more than ever in networks and infrastructure
as data usage increases exponentially and efforts to reduce the digital divide
are being ramped-up,” said Edward Kozel, chief technology and innovation
officer at Deutsche Telekom. “With France Telecom-Orange we have an experienced
and trusted partner who shares the same approach regarding economies of scale
as well as customer benefits in technology harmonisation.”
Olaf Swantee, the executive vice
president for Europe and Sourcing at France Telecom-Orange, said: “The joint
venture will offer a more efficient sourcing organisation that will lead to
more effective partnerships with suppliers. This will enable us to drive
innovation and shape the development of technology in a way that meets
The joint venture will have two
operational units, one in Deutsche
Telekom’s headquarters in Bonn and the other at France Telecom-Orange’s
head office in Paris. Buyers from both groups with customer equipment, network
technology, service platforms and IT infrastructure expertise will staff these