Deutsche Telekom and France Telecom sign final agreement to combine T-Mobile UK and Orange UK

Deutsche Telekom and France Telecom signed the final agreement to combine their UK operations, T-Mobile and Orange, into a 50:50 joint venture company. Now that the confirmatory due diligence has been completed, this binding agreement confirms the terms of the transaction announced on 8 September 2009.

Completion is conditional upon approval by the relevant authorities and remains expected in the first half of 2010 as previously indicated. The agreement is subject to the approval of the Supervisory Board of Deutsche Telekom and the Board of Directors of France Telecom. Timotheus Höttges, CFO of Deutsche Telekom, said: "This joint venture is based on the full commitment of Deutsche Telekom and France Telecom to a long term partnership. The negotiations were conducted in a fair way on both sides and I am certain that this spirit of professionalism and partnership will shape the future of our joint venture. It will set new standards as the number one in the UK mobile market"

Gervais Pellissier, deputy CEO in charge of Group Finance & Information Systems, said: "The relative terms of the transaction as announced on 8 September were fully confirmed. I would like to stress the excellent cooperation between the teams of Deutsche Telekom and France Telecom, which enabled us to deliver on the timing and process objectives which we set out in September. This is an important step towards our objective of establishing an excellent platform to deliver operational synergies and offer innovative and high quality services to our customers"

Deutsche Telekom is one of the leading integrated telecommunications companies worldwide with approx. 151 million mobile customers, around 39 million fixed network lines and approx. 15 million broadband lines (as of September 30, 2009). The group is present in around 50 countries worldwide with approx. 260,000 employees (as of September 30, 2009). In the first three quarters of 2009 Deutsche Telekom generated more than half of its revenues of EUR 48.4 billion outside of Germany. Major subsidiaries in Europe include the integrated telecoms providers OTE in Greece, Magyar Telekom in Hungary, T-Hrvatski Telekom in Croatia and Slovak Telekom in Slovakia. The group has mobile communications subsidiaries in Germany, the US, the UK, Greece, The Netherlands, Austria, Poland, Czech Republic , Croatia, Hungary, Slovakia, Greece, Romania, Bulgaria, FYROM and Montenegro. Deutsche Telekom operates three product brands: T-Home provides state-of-the-art fixed network infrastructures, fast internet access and innovative multimedia services such as IPTV. T-Mobile, on of the world’s leading mobile service companies, provides a comprehensive portfolio of mobile voice and data services in Europe and the US, as well as mobile broadband services. T-Mobile is exclusive partner for the Apple iPHone in Germany, The Netherlands, Hungary and Croatia. In addition, T-Mobile markets the iPhone in a further eight European countries. T-Systems, the business customer operation of Deutsche Telekom, offers integrated ICT solutions to multinational customers.

France Telecom, one of the world’s leading telecommunications operators, had consolidated sales of 53.5 billion euros in 2008 (25.5 billion euros in the first half of 2009) and, at 30 June 2009, a customer base of 186 million customers in 32 countries. Orange, the Group’s single brand for Internet, television and mobile services in the majority of countries where the company operates, now covers 124.5 million customers. At the first half of 2009, the Group had 125.5 million mobile customers and 13.4 million broadband Internet (ADSL) customers worldwide. Orange is the number three mobile operator and the number two provider of broadband Internet services in Europe and, under the brand Orange Business Services, is one of the world leaders in providing telecommunication services to multinational companies. The Group’s strategy, which is characterized by a strong focus on innovation, convergence and effective cost management, aims to establish Orange as an integrated operator and benchmark for new telecommunications services in Europe. Today the Group remains focused on its core activities as a network operator, while working to develop its position in new growth activities. To meet customer expectations, the Group strives to provide products and services that are simple and user-friendly, while maintaining a sustainable and responsible business model that can be adapted to the requirements of a fast-paced and changing eco-system. France Telecom (NYSE:FTE) is listed on Euronext Paris (compartment A) and on the New York Stock Exchange.

T-Mobile is one of the world’s largest mobile operators with more than 150 million customers worldwide and is the service provider of choice for 16.6 million customers in the UK. T-Mobile offers a range of innovative products and services, such as Solo, the SIM-only plan, Combi, a traditional minutes and text package, and Flext, the UK’s first flexible tariff. T-Mobile continues to innovate with new devices such as the UK’s first Android™-based smart phone, the T-Mobile G1, and its successor the T-Mobile G2, both with access to more than 1,000 applications. T-Mobile has pioneered the mobile internet, and operates an award-winning 3G network with speeds of up to 4.5Mbps. As a pioneer of deep network sharing in the UK, T-Mobile is continuously improving population coverage for 3G services and will operate the best 3G network by the end of 2010.

In the UK, Orange provides high quality GSM coverage to 99% of the UK population. At the end of July 2009, Orange had almost 17 million customers in the UK – 15.9 million active mobile customers and close to one million fixed broadband customers. Orange and any other Orange product or service names included in this material are trade marks of Orange Personal Communications Services Limited.

Source: Deutsche Telekom