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October 17, 2011

Deutsche Telekom, France Télécom-Orange partner to form procurement JV

Targeted annual run rate of EUR1.3bn in combined savings to be generated after three years of implementation

By CBR Staff Writer

Integrated telecommunications company Deutsche Telekom and telecommunications operator France Télécom-Orange have partnered to form a procurement joint venture (JV) BUYIN which got the approval by relevant anti-trust authorities, starts its operations.

Deutsche Telekom and France Télécom-Orange have grouped their procurement activities in the areas: terminal devices, mobile communications networks, and in significant portions of their fixed-network equipment and service platforms.

The two companies plans to launch pilot projects to explore other areas which include IT infrastructure and further IT areas and in establishing BUYIN, the companies plans to improve their procurement capablites and generate sustainable economies of scale and savings for their customers.

In addition to the joint use of radio access networks in Europe, WiFi roaming and machine-to-machine (M2M) services, additional possibilities for cooperation in other growth areas will also be examined.

Volker Pyrtek leads as Managing Director and Chief Procurement Officer of BUYIN, said Deutsche Telekom.

Deutsche Telekom said it estimates a targeted annual run rate of EUR1.3 billion in combined savings to be generated after three years of implementation.

France Télécom-Orange Group general secretary and executive vice-president Pierre Louette said the teams from the two companies have worked intensively with each other and put together a good agreement that has also won the approval of the anti-trust bodies.

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"Our joint venture enables us to increase our competitiveness and will lead to an even more effective partnership with our suppliers that takes into account the needs of our customers," said Louette.

Deutsche Telekom chief technology and innovation officer Edward R. Kozel said now the two companies can start working together to tap into the large and growing potential savings from joint procurement.

"Volker Pyrtek is a truly entrepreneurial procurement leader who has demonstrated his expertise in the past eight years being responsible for procurement at T-Mobile and Deutsche Telekom. I am confident that we will quickly be able to realize the available synergies under his direction, with procurement making a significant contribution to the realization of our Telco+ strategy," added Kozel.

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