{"id":8938,"date":"2015-03-24T18:33:42","date_gmt":"2015-03-24T18:33:42","guid":{"rendered":"http:\/\/www.ispreview.co.uk\/?p=8938"},"modified":"2015-03-25T10:44:49","modified_gmt":"2015-03-25T10:44:49","slug":"three-uk-finally-reaches-deal-to-buy-o2-from-telefonica-for-10-25bn","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2015\/03\/three-uk-finally-reaches-deal-to-buy-o2-from-telefonica-for-10-25bn.html","title":{"rendered":"UPDATE Three UK Finalises Deal to Buy O2 from Telefonica for \u00a310.25bn"},"content":{"rendered":"<p>The parent company of mobile operator <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/threeuk\" rel=\"nofollow\" target=\"_blank\">Three UK<\/a>, Hutchison Whampoa, has confirmed that they&#8217;ve finally reached a &#8220;<em>definitive agreement<\/em>&#8221; to buy <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/o2uk\" rel=\"nofollow\" target=\"_blank\">O2<\/a> UK from debt-laden Telefonica for the previously touted price of \u00a310.25 Billion (cash). But we&#8217;re still not sure where the long-term advantage can be found.<\/p>\n<p><!--more--><\/p>\n<p>The announcement follows a two-month long period of negotiation after both operators initially announced that they had entered into an &#8220;<em>exclusivity agreement<\/em>&#8221; (<a href=\"http:\/\/www.ispreview.co.uk\/index.php\/2015\/01\/confirmed-three-uk-enters-exclusive-talks-buy-o2-10-25bn.html\" target=\"_blank\">here<\/a>), which meant that Telefonica had accepted a preliminary offer and thus Hutchison Whampoa needed to check through their books in order to ensure that there were no nasty surprises.<\/p>\n<p>It&#8217;s known that <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/threeuk\" rel=\"nofollow\" target=\"_blank\">Three UK<\/a>&#8217;s parent had initially been interested in gobbling <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/eebroadband\" rel=\"nofollow\" target=\"_blank\">EE<\/a>, but all that changed when <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/britishtelecom\" rel=\"nofollow\" target=\"_blank\">BT<\/a> made the first move and secured a deal. Never the less today&#8217;s agreement should create the United Kingdom&#8217;s largest mobile operator, with around <strong>34 million customers<\/strong> (41% market share, well above <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/eebroadband\" rel=\"nofollow\" target=\"_blank\">EE<\/a>&#8217;s 29%), and that will also reduce the number of primary <strong>Mobile Network Operators<\/strong> (MNO) from four to three, which is sure to attract some regulatory scrutiny.<\/p>\n<blockquote class=\"bq1\"><p><strong>Telefonica Statement<\/strong><\/p>\n<p><em>Hutchison Whampoa has today agreed definitive terms to acquire <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/o2uk\" rel=\"nofollow\" target=\"_blank\">O2<\/a> in the UK from Telef\u00f3nica. The deal agreed is the result of a period of exclusive discussions between the two companies. Closing of the deal is subject to regulatory approvals, but would bring together two respected mobile businesses in the UK.<\/em><\/p>\n<p><em><a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/o2uk\" rel=\"nofollow\" target=\"_blank\">O2<\/a>\u2019s vision has always been to provide the very best customer experience. This deal will \u2013 subject to merger clearance \u2013 result in the creation of the most customer-centric mobile operator in the UK. We are pleased to be integral to such an exciting ambition and are confident that as a result of the deal, UK customers will benefit from greater value, quality and innovation. We also fully expect that new and exciting opportunities will open up for employees of both businesses.<\/em><\/p>\n<p><em>The deal is subject to regulatory approvals which might take up to a year. In the meantime, our priority is to continue to look after our customers, delivering the very best experience that they have come to expect from O2.<\/em><\/p><\/blockquote>\n<p>The big question now, assuming the deal passes through a review by the UK and European competition \/ regulatory authorities unscathed (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\">Ofcom<\/a> are not a fan of seeing fewer operators), is what comes next?<\/p>\n<p>The wider market, which at present is being led by <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/britishtelecom\" rel=\"nofollow\" target=\"_blank\">BT<\/a>&#8217;s move to gobble <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/eebroadband\" rel=\"nofollow\" target=\"_blank\">EE<\/a>, is clearly galloping towards convergence and quad-play bundles of home broadband, phone, TV and mobile. But O2 sold their declining fixed line broadband and phone network to <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/bskyb\" rel=\"nofollow\" target=\"_blank\">Sky Broadband<\/a> in 2013 and <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/threeuk\" rel=\"nofollow\" target=\"_blank\">Three UK<\/a> is also a mobile-only operator, which limits their options.<\/p>\n<p>On top of that there&#8217;s the increasingly complex web of <strong>Network Sharing<\/strong> and <strong>Mobile Virtual Network Operator<\/strong> (MVNO) deals to consider, with both <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/tt\" rel=\"nofollow\" target=\"_blank\">TalkTalk<\/a> and <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/bskyb\" rel=\"nofollow\" target=\"_blank\">Sky Broadband<\/a> having signed MVNO deals with O2.<\/p>\n<p>The MVNO deals aren&#8217;t likely to be much of a concern due to O2\/Three UK&#8217;s (aka &#8211; <em>Throat<\/em>, as we like to call them) lack of a fixed line business, although O2 also has a network sharing agreement with <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/vodafoneuk\" rel=\"nofollow\" target=\"_blank\">Vodafone<\/a> and Three UK has one with EE. Somewhere along the lines a difficult decision will have to be taken because that situation may soon start to look untenable.<\/p>\n<p>Meanwhile Three UK&#8217;s customers will be hoping that the operators low-cost and data centric approach isn&#8217;t sacrificed, while O2 users will be wary of any potential quality loss to the now more budget conscious owner. Both operators also have fairly recognisable brands, but Hutchison Whampoa may well wish to move them under a single umbrella.<\/p>\n<p>In any case we&#8217;ll have to wait and see how everything turns out, although it could a year before everything is completed (the same as with <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/britishtelecom\" rel=\"nofollow\" target=\"_blank\">BT<\/a>&#8217;s purchase of EE) and that&#8217;s assuming the competition authorities don&#8217;t raise concerns.<\/p>\n<p><strong>UPDATE 25th March 2015<\/strong><\/p>\n<p>A comment from <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/cityfibre\" target=\"_blank\">CityFibre<\/a>.<\/p>\n<blockquote class=\"bq1\"><p><strong>Mark Collins, Director of Strategy at <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/cityfibre\" target=\"_blank\">CityFibre<\/a>, told ISPreview.co.uk:<\/strong><\/p>\n<p>&#8220;<em><a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/cityfibre\" target=\"_blank\">CityFibre<\/a> welcomes the merger of O2 and Three, especially in light of the recent acquisition of EE by BT \u2013 it is in the market\u2019s interest that a formidable competitor should arise. Consolidation is the only way to combat BT\u2019s ever-growing monopoly over both the retail and wholesale telecoms sectors. It is essential that a combined Three\/O2 must have its own mobile fibre backhaul infrastructure network, independent of BT.<\/em><\/p>\n<p><em>Mobile operators in the UK are clearly demonstrating their appetite for independent, alternative infrastructure \u2013 as highlighted by the recent national framework agreement signed between CityFibre, Three and EE last year. Hull a city long in need of supplier diversity and the first city where our framework agreement has been implemented, is already seeing 62km of alternative network infrastructure being installed. CityFibre can do the same for the rest of the UK, significantly boosting the economy in the process, if an environment where investors have confidence to continue investing is maintained<\/em>.&#8221;<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>The parent company of mobile operator Three UK, Hutchison Whampoa, has confirmed that they&#8217;ve finally reached a &#8220;definitive agreement&#8221; to buy O2 UK from debt-laden Telefonica for the previously touted price of \u00a310.25 Billion (cash). But we&#8217;re still not sure where the long-term advantage can be found.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[62,61,474,405,60,32,63],"class_list":["post-8938","post","type-post","status-publish","format-standard","hentry","category-uk_isp_news","tag-3g","tag-4g","tag-bt","tag-ee","tag-mobile-broadband","tag-o2","tag-three-uk"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>UPDATE Three UK Finalises Deal to Buy O2 from Telefonica for \u00a310.25bn - ISPreview UK<\/title>\n<meta name=\"description\" content=\"The parent company of mobile operator Three UK, Hutchison Whampoa, has confirmed that they&#039;ve finally reached a &quot;definitive agreement&quot; to buy O2 UK from\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2015\/03\/three-uk-finally-reaches-deal-to-buy-o2-from-telefonica-for-10-25bn.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"UPDATE Three UK Finalises Deal to Buy O2 from Telefonica for \u00a310.25bn - 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