According to SDA, Sieber said that the optimization of personnel would be evaluated in the course of the merger of Orange and Sunrise. The cost savings from the operating business amounted to CHF 200 million per year. Most of this would come from the rationalization of processes and functions, which would generate annual savings of around CHF 80 million, said Sieber. This includes structural savings, particularly in real estate, personnel savings and the elimination of overlaps. 73 million would be saved by merging the two mobile networks and IT. As a result, there will be a third fewer antenna sites than both networks have today. Nevertheless, coverage will improve. Finally, marketing and sales will contribute 47 million annually to the savings in operating costs. On the other hand, the costs for the integration of the two companies amounted to a cumulative CHF 140 million.
Strong competitor to Swisscom
Between 2010 and 2015, there would be synergies of CHF 570 million in investments after deducting integration costs. Annual savings of CHF 65 million are expected from 2015 onwards. In total, the synergies would amount to CHF 3.2 billion. Together, Sunrise and Orange would be the leading alternative telecoms provider in the Swiss market and a strong competitor to Swisscom, said France Télécom CFO Gervais Pellissier.
Last year, combined sales of CHF 3.093 billion and an operating profit before depreciation and amortization (EBITDA) of CHF 809 million were achieved, said Olaf Swantee, responsible for Orange's global mobile business customers. In the first half of 2009, turnover would have amounted to 1.6 billion francs and EBITDA to 398 million francs.
Market share of 38.4 percent in mobile communications
The merger will increase the market share in mobile communications to 38.4%. The new company had 3.423 million mobile customers at the end of June, while Swisscom had 5.478 million mobile customers. In addition, there are 1.09 million customers in the fixed network business, in which Orange has hardly been active to date. This gives Orange a market share of 13 percent in the broadband business. Orange and Sunrise would operate over 100 stores in future. Sieber has not yet announced which stores will be closed.
Green light expected by mid-May
The Competition Commission (ComCo) still has to approve the deal. The green light is expected by the middle of next May, said Pellissier. Only then will the transaction be completed. Until then, Orange and Sunrise will operate independently of each other. The future name of the company will be decided once the transaction has been completed. The Danish Sunrise owner TDC expects a complete exit from the merged Sunrise/Orange Switzerland by 2014. The merger agreement provides for three options: Firstly, the new company could buy back shares from TDC every year from 2012 to 2014. This is a likely option and the exit is expected to take place by 2014, explained TDC CFO Jesper Ovesen.
In addition, TDC could sell its stake to a third party at the earliest two years after the conclusion of the agreement, or the new company could be listed on the stock exchange after three years at the earliest. Alternatively, France Telecom has the option to exercise a call option on TDC's 25% stake on an ongoing basis after the first year following the conclusion of the transaction.