Orange and T-Mobile will merge and create the biggest UK Operator, holding 37% of the market with over 28 million customers. http://news.bbc.co.uk/1/hi/business/8243226.stm

O2 and Vodafone have always managed to secure deals to offer the best handsets on attractive deals in the UK with Orange and T-Mobile struggling to compete. I hope Im wrong but this decision / ability not to secure Vodafone’s purchase of T-Mobile could have more serious ramifications for Vodafone than the failure to get exclusivity on the Iphone. 

The switch in market power may alter any ongoing discussions between Apple and UK operators on distribution rights for the next generation of the Iphone, rumoured to be a Nano type device released in time for Christmas this year.

The future of the newly formed entity will be interesting to see. Will they continue to focus on the bottom, value end of the market or given their increased bargaining power will they make a play for more lucrative customers? They will have more options, more choice and more power but will they know how to use it?

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