Reports suggest Three UK/02 deal close

Reports suggest Three UK/02 deal close

Hutchison Whampoa is expected to finalise its proposed £10.5bn deal for Telefonica owned 02 this week, reports have suggested.

The Hong Kong based conglomerate, which already owns Three UK, has completed the two month period of due diligence begun in January this year whilst sounding out potential investors including China Investment Corporation and Singapore’s Temasek to bankroll what would be the single biggest deal in Hutchison Whampoa’s history, according to reports.

The acquisition would still require approval from the UK regulator Ofcom as well as the European Community (EC) anti-trust authority, whose chief Magrethe Vestager is responsible for vetting the deal. Vestager has shown no sign of raising any significant objection providing such mergers do not endanger affordable prices for consumers or result in tariffs going up, however.

Not only would the combined assets of Three and 02 make the new company the UK’s largest mobile operator in terms of subscriber numbers (estimated at 32m), it would leave the market populated by just three competitors including BT - currently in the process of completing its acquisition of Orange/T-Mobile owned EE and itself subject to regulatory approval - and Vodafone.

Though the EC competition authority will have the final say, the deal puts Ofcom under particular pressure. The UK regulator is thought to have engineered the 2013 auction of fourth generation (4G) mobile frequency spectrum specifically to accommodate four UK mobile operators and has been opposed to further consolidation of the telecoms market since Orange and T-Mobile merged to form EE in 2010.

Far reaching ramifications for the UK’s fixed broadband market will also come under scrutiny. Both Sky and TalkTalk have agreed recent deals to offer mobile virtual network operator (MVNO) services under their own brands using 02’s network, bringing Three UK into competition with BT and Vodafone in the provision of triple and/or quad play packages based on bundled telephony, broadband, TV and mobile services.

In a recent interview with Mobile O2 CEO Ronan Dunne said that he believed that the key to consumer choice was in the number of propositions on the market rather than how many operators existed: ‘The number of propositions at the customer interface level, rather the number of networks, is the key to giving the consumer choice’ he said.


Never mind about the number of propositions on the market it's reliability of connection and speed that they should be concentrating on! Mobile broadb ...
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