A huge mobile shake-up has just kicked off in Britain. Telefonica has agreed to sell O2 to Hutchison Whampoa, the owner of Three UK, for £10.25 billion. We knew it was likely, after the pair entered “exclusive negotiations” back in January, but now it’s essentially a done deal. Provided the purchase is approved by regulators, it means the UK’s four major networks will soon become three: Vodafone, EE and the combined might of Three and O2. The confirmation comes by way of O2 and Telefonica, although both are saying relatively little about the acquisition. For instance, it’s unclear if Hutchison Whampoa plans to maintain the O2 brand in the UK, or merge it entirely with Three.
Together, Three and O2 boast the biggest mobile subscriber base in the UK, putting further pressure on EE and Vodafone. BT, however, is working on a plan of its own for UK mobile domination. The company, which sold off O2 for £17.7 billion almost a decade ago, is currently in talks with Orange and Deutsche Telekom to buy EE. The deal, if successful, is expected to cost £12.5 billion and would give BT’s credentials as a quad-play provider a massive boost in the UK. In the meantime, the company is readying a new mobile service powered by EE’s network. It’s not the same as actually owning EE’s infrastructure and customers, but regardless, such a move should give Sky something to think about. Sky, meanwhile, is experimenting with a new Vodafone partnership, which could be an early sign it’s interested in becoming a mobile virtual network operator (MVNO) too.
Exactly when all these deals will go through isn’t clear, but it’s obvious that we’re on the cusp of a major sea change in the UK telecoms industry. We won’t know the winners and losers for a while, but renewed competition should be good for the consumer, and ultimately lead to better prices when you’re next shopping around for a new contract.
Filed under: Networking