Telecoms groups team up on procurement

Deutsche Telekom and France Telecom will achieve €1.3bn ($1.85bn) in annual savings by merging key procurement activities in Europe. A joint venture, to be established in the fourth quarter of this year, will combine procurement in areas such as network equipment and IT infrastructure. Deutsche Telekom expects to save an annual €400 million from 2015 onwards, while France Telecom foresees savings of €900 million. Analysts attributed the disparity between the figures to Deutsche Telekom’s greater global reach, which had allowed it to achieve greater economies of scale to date than France Telecom. The joint venture, with offices in Paris and Bonn, will employ 200 people and will cost about €35 million to set up.