Orange and T-Mobile have announced in recent days a deal to create the UK's largest mobile phone operator reports Chris Hicks of Fisher German Chartered Surveyors.

It is understood that the new operator will have more than 30 million customers and push nearest rivals, O2 and Vodafone, into second and third place in terms of market share.  It is reported that Orange and T-Mobile will continue to run separate businesses with both brands remaining fiercely competitive, but the operators will share mobile phone base stations and other infrastructure thereby delivering significant cost savings. This will result in a reduction in the number of mobile phone masts located throughout the UK and the income landlords can expect to receive.

The Orange and T-Mobile proposed merger follows another initiative announced by T-Mobile and H3G in 2008 who are seeking to consolidate their networks together. Following on, earlier in 2009, Vodafone and O2 also announced their own plans to share their mobile phone networks.

Landlords are advised to embrace the operators' plans thereby seeking to ensure their mobile phone base stations are retained wherever possible in the consolidated networks advises Chris Hicks.

Landlords should check their leases when approached by the operators to share sites. Many leases will not permit sharing without payment of additional monies and therefore landlords might very well benefit financially from these initiatives. The proposed sharing arrangements may well also present landlords with opportunities to negotiate rents and other unfavourable terms of leases and therefore Chris Hicks advises that landlords should seek professional advice if approached to share.

It is however inevitable that some landlords will be faced with having their site decommissioned and their lease terminated. Chris Hicks advises that landlords again check their leases to establish what termination rights the operator might have as, in many instances, the operator will not have the right to break. Significant one-off up front payments can in such circumstances be negotiated to allow an operator to break his lease early.

Finally, it is reported that the proposed joint venture between Orange and T-Mobile will give them a 37 per cent share of the British market ahead of O2 with 27 per cent and Vodafone with 25 per cent. It is likely that the deal will come under close inspection from the competition regulators at Ofcom and the European Union. Until these hurdles have been overcome, it is not expected for the deal to be signed.