France Telecom today unveiled plans to buy U.K. wireless carrier Orange plc for more than $40 billion in cash and stock. Pending European Commission approval, the French telco will combine its wireless assets with those of Orange to create a separate company, dubbed New Orange, which plans to become a pan-European wireless operator.
"Orange has long said that the mobile [wireless] industry must create regional and, ultimately, global footprints, ensuring the seamless branding and operation of wire-free services," Hans Snook, Orange CEO and New Orange co-leader, said in a statement. The new powerhouse will likely also include the license Orange expects to receive to offer next-generation high-speed wireless Internet access services in the United Kingdom. New Orange will own or have varying-size stakes in wireless carriers in almost 20 countries beyond the United Kingdom and France.
"CIOs want global integration of wireless data services, but will have to wait as consolidation alone means integration of billing and back-office systems for starters," says Daniel Briere, founder of TeleChoice, a consulting and research firm. "And this must-have for companies also means dealing with different technologies and standards between the United States and the rest of the world."
The megadeal is expected to be approved in six weeks, according to a France Telecom spokeswoman. New Orange expects to have 30 million controlled subscribers by year's end.