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Dirk Weber


After the Acquisition: Mergers & Inhouse Consulting

When a subsidiary buys a competitor and reinvents itself - a unique experience for inhouse consultants.

In 2018, T-Mobile Austria bought its competitor UPC Austria, a cable TV and internet provider, for EUR 1.9 billion. The goal: to offer customers in Austria the best customer experience in mobile communications, television and the internet from a single source. After the acquisition of UPC Austria, T-Mobile Austria now has around 2,500 employees and serves around 7.2 million lines.

Mobile Austria and UPC Austria become Magenta – a strong, integrated challenger in the Austrian telecommunications market.

Mobile Austria and UPC Austria become Magenta – a strong, integrated challenger in the Austrian telecommunications market.

As usual with such mergers and acquisitions, T-Mobile Austria initially brought in external consulting firms for post-merger integration (PMI). After the first project phase was completed, further measures were taken to ensure the sustainability of the PMI. What to do? Once again rely on an external consulting team? Instead, the management decided to use a team of inhouse consultants from Deutsche Telekom's headquarters in Bonn. One reason: hardly any other consulting team from the outside knows the telecommunications market as well as DT’s own specialists. But getting an internal consulting team on board for a merger project can also be challenging - in the opinion of some managers.
For example, unpleasant decisions that affect colleagues within the company could be a hurdle. But the advantages outweighed the disadvantages.

Not a Routine Project for Inhouse Consultants

At the beginning of 2019, our senior project manager York-Cornel Uellenberg and his team started in Vienna with tracking milestones and classic tasks of a PMI: connecting the management organization, staffing the management team, aligning employee behavior, integrating operational business activities and, last but not least, ensuring the planned synergies and financial goals of the merger. Business as usual for a post-merger integrator.
For an inhouse consultant, however, a PMI is anything but routine. It's an opportunity and a risk at the same time. It was clear to the CSP team that a smooth merger could result in further similar projects. At least, takeovers of other companies as well as mergers with subsidiaries are almost the norm at Deutsche Telekom. But the risk of failure was almost as high. The consequences would be severe: the first and probably the last project of this kind.

Consulting Skills and Cooperation between Colleagues

Luckily it turned out differently: The PMI unfolded its full potential and developed into a successful consulting project to the complete satisfaction of all participants. The team was able to combine the skills and methods of an external consultancy with a cooperative approach and formed a joint team with the client. This also resulted in knowledge transfer and experience sharing between the national companies and the headquarter. Both is rather rare when external consultants are at work. The satisfaction of the T-Mobile Austria management was reflected in the scope of the project. After the first phase, the scope expanded significantly. In addition to the classic PMI, the consulting team also accompanied the rebranding and developed a product and sales strategy for the convergent products and broadband sales.

Opportunity for Inhouse Consultants

And incidentally, CSP consultants also had the chance to prove themselves in an extraordinary project. Weekly meetings with the senior management of the new company. Every two weeks a meeting with the entire management of T-Mobile Austria. For the consultants this was a chance to experience top management directly - and to contribute ideas. Young consultants rarely get this opportunity in large consulting firms. 

Restart: Magenta in the center of the new brand

Restart: Magenta in the center of the new brand

And the result of the project: whoever walks around Austria will find out that the T-Mobile presence has completely disappeared. Instead, the Austrian subsidiary of Deutsche Telekom now appears under the name "Magenta" and the merger with UPC Austria is history for the entire PMI team. What remains are the consistently good experiences that the Magenta management and the CSP team made with this unusual consulting approach. The best of two worlds worked out. And the results are sustainable. While external consultants are through the door after the completion of a project, a mixed team ensures success in the long run.