Three owner reportedly talks to buy O2 in the UK

Money On Hook

Three-owner Hutchison Whampoa is in talks to buy Britain’s second-largest mobile phone operator O2 for up to £9bn, according to reports.

The Hong Kong conglomerate owns the UK’s smallest network, Three, which has 8 million customers but bought O2 in Ireland in 2014 to combine with Three Ireland and Orange Austria in 2012.

Telefonica is in early stage discussions with Hutchison Whampoa and its Hong Kong tycoon Li Ka-shing over the sale of O2 with its 23 million customers, according to a report by the Sunday Times [LINK?].

The purchase would reunite the O2 UK and Ireland and be the latest consolidation deal in Europe, where the economic downturn has instigated a scramble between mobile and fixed-line operators to combine efforts.

BT’s £12.5bn agreement to purchase the UK’s largest mobile operator EE came as revenue for mobile operators continue to fall and revenue for broadband increase. The deal has put pressure on smaller operators in the UK, looking for ways to compete against the new largest fixed-line and mobile operator.

Telefonica is under pressure to reduce costs and debts after being hit hard by the downturn in the Spanish economy. A sale or floatation of O2 would be one way to realise capital from its UK assets worth between £8bn and £9bn.

How the move would be seen by the telecoms regulator Ofcom, which would see a potential reduction in the number of primary mobile phone operators from four to three, is unclear.

Three, Hutchison Whampoa and Telefonica declined to comment.

Powered by Guardian.co.ukThis article was written by Samuel Gibbs, for theguardian.com on Monday 19th January 2015 10.56 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010

 

JefferiesAnd the Best Place to Work in the global financial markets 2016 is...

Register for Financial Markets News Alerts