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Three to buy O2 thus creating the largest UK mobile operator
Thursday 22 January 2015 23:59:05 by Andrew Ferguson

Assuming what is being reported by The Telegraph does take place on Friday the merger between O2 and Three, where Hutchinson Whampoa who run Three are paying O2 £10bn will create the largest UK mobile company at some 32 million customers.

Telefonica has been looking to sell its UK mobile operation O2 for some time, after previously divesting itself of its fixed line operations over a year ago. The sale will require approval from the EU, which is expected to happen.

This move will reduce the number of mobile network operators to three, i.e. Vodafone, Three and EE. EE is expected to be purchased by BT in the near future for around £12.5 billion which will place EE/BT in an unusual position compared to the other two of having a substantial fixed line network in addition to a mobile operation. Vodafone does own C&W which operates a backbone and LLU network, but the fixed line LLU presence is relatively small compared to Sky and TalkTalk.


Posted by lelpep over 2 years ago
Will this mean that 3 & O2 mobile users will be able to use each other's networks in order to get better reception?
Posted by otester over 2 years ago
Might as well just make the cartel official and merge the rest of them...

Posted by _Resonance_ over 2 years ago
@lelpep Yes eventually that would be the case. When the networks are integrated I would think there will be some masts decommissioned, as they won't want to cover the same area with two masts. This happened when Orange and T-Mobile became EE.

It should be good for both sets of customers coverage wise. Three customers will benefit from the very good 2G coverage of O2 and O2 customers will benefit from the much better 3G coverage of Three.
Posted by mdar5 over 2 years ago
That is the way the EU is leaning.
It has been making unofficial noises along the lines that excess competition in the telecoms industry has been driving down prices to a level where investment is being curtailed.

So we can see more mergers being approved. More exclusivity being allowed to guaranteed future earning to make long term investment in infrastructure viable.
Posted by Fellwalker over 2 years ago
This sounds like the banks where mergers /takeovers were encouraged, and now they are trying to break the banks up.

Is the eu run by lawyers by any chance, because they are the ones to benefit from deals like this. Competition is good for consumers, and if businesses sell below the amount they need to make to invest, more fool them ; they will lose customers.
Posted by zyborg47 over 2 years ago
More funny handshakes from the EU. this is not a good thing, less competition for us the consumers, mean price rises. The broadband market is going this way as well. All we will have is large companies who try and flog us a load of stuff we may not want.
Posted by Kebabselector over 2 years ago
Time to say goodbye to customer service and UK call centres then. Also wonder what they'll do to GiffGaff?
Posted by mitchja over 2 years ago
What's going to happen to the MBNL EE/Three network mast/backhaul share thing and the O2/Voda Cornerstone mast share thing now though?

That's going to be a nightmare to unravel isn't it?
Posted by c_j_ over 2 years ago
"Competition is good for consumers"

Well informed consumers can sometimes benefit from a fair competitive market. Not applicable here.

Do the mobile telcos want their prospective customers to be well informed on the things that matter: coverage, mobile service quality (including performance), customer service quality? Oh, and price.

GiffGaff was a break from the norm. Bye bye GG?
Posted by browney over 2 years ago
I think it's a good think, so long as it doesn't take years to share signal between the two.
Posted by ValueforMoney over 2 years ago
Mitchja - yes but I assume Three users migrate to Cornerstone

MBNL - gets sucked into Openrean/BT Wholesale

Three network I assume get de-commissioned with customers moving to Cornerstone over time.

More clawback on BDUK fibres used by BT/EE mobile.
Posted by Ixel over 2 years ago
I dread to think how this may effect Giffgaff, A&A or any other MVNO (mobile virtual network operator). I hope this doesn't cause A&A to lose their SIM2SIM service again.
Posted by TheEulerID over 2 years ago
This is all gradually moving towards consolidated infrastructure environments as this is surely the way the economics of the industry is driving things. Of course the logical consequence of that is far more regulatory intervention and a functional separation of wholesale and retail activities. Which is, of course, the model of other major utilities.
There is, of course, quite a lot of intervention in mobile already - roaming, call termination charges, wholesaling etc.
Posted by otester over 2 years ago

While that's the case with virtual operators, with network operators it's the opposite.

The government is stifling competition with excessive regulation/taxes.
Posted by George99 over 2 years ago
Where's the competition in this model
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