A major shake up in the mobile phone industry is expected after Orange and T-Mobile agreed to a merger. The new company will have 28.4 million customers and almost a 40 % share of the market. The 2 companies are currently the third and fourth largest in the market but they will take the lead over O2′s 27% .

Analysts say that this deal could trigger off further similar deals especially with smaller companies. Vodafone and BT were mentioned but this was dismissed. Other experts are worried that there could be less incentive to offer good deals. However Tom Alexander from Orange and Richard Moat from T-Mobile are insisting that any savings will be passed onto customers. They are confident that the merger will not see any price increases and will benefit consumers with a better quality service and an improved network coverage.

Richard Moat will be the chief operating officer in the new company, while Tom Alexander will become the new chief executive. Moat has admitted that job losses are inevitable but the two brands will continue to operate seperately for at least 18 months. The deal will mean fewer phone masts . The deal is expected to generate savings of £3.5 billion and should be finalised by the end of October.