UK's Mobile Phone Merger Good For Customers? - InformationWeek

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Infrastructure // PC & Servers

UK's Mobile Phone Merger Good For Customers?

The merger between the UK's Orange and T-Mobile mobile carriers was touted this week with the usual promises about benefits for customers. I can't figure out how the equation adds up.

The merger between the UK's Orange and T-Mobile mobile carriers was touted this week with the usual promises about benefits for customers. I can't figure out how the equation adds up.The combined company plans to serve something close to 30 million customers after axing 1,000+ jobs, 5,000 cell towers, and finding other economies of scale that'll help yield billions in cost savings. The "benefits" will result from increased coverage (more towers, minus the ones felled), and closer customer proximity to retail stores (also resulting from the merger), which it somehow correlates with better service.

I wonder how many customers will believe it, and for those that do, how long it will take for them to be disabused of the opinion?

There's no track record in the annals of merger history to suggest that this event will result in anything good for anybody, outside of the few employees left in the company's accounting department. When banks merge, wait times get longer and services cost more. Automotive mergers don't yield better or cheaper cars. The various landline/mobile courtships in the US over the past few years haven't yielded better customer benefits, have they?

Usually, the conduct of day-to-day business is a challenge for newly-merged companies, not an opportunity. It's hard to focus on customer benefits when you're busy slashing or combining things that never worked perfectly in the first place. In the technology world, it's even harder, as there are more customer issues to consider with a complex device than, say, a tube of toothpaste.

The branding implications of these activities are immense: think of how much money Orange and T-Mobile spent to claim to be competitively different, and now poof! Just kidding. Even more money will be spent to declare otherwise.

It just seems disingenuous to claim that the business decision had anything to do with customers, unless finding ways to profitably stay in business counts. I don't know why the marketing experts didn't skip the wan promises of "benefits" altogether, and portray the merger as the strategic financial move it (hopefully) is.

What do you think?

Jonathan Salem Baskin writes the Dim Bulb blog and is the author of Branding Only Works On Cattle.

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