Wednesday, February 4, 2015

3 Hutchison Purchases O2 To Create The UK’s Biggest Carrier


Due to reports 3 Hutchison purchases O2. This information was published in a Hong Kong-based company statement. It also said that it is in exclusive negotiations with Telefonica to acquire mobile carrier O2 in the UK, offering to pay up to 10.25 billion pounds($15.3 billion, €13.5 billion ). In the near future Hutchison plans to merge O2 with its existing UK business Three to create the UK’s biggest carrier. This is the first time in Hutch's history when it has made a public statement about its intentions to purchase the carrier. However there have been another reports of the deal since last weekend, also O2 has been on the block since November 2014.


Currently there are three large mobile carriers (EE, Vodafone and O2) and Three is on its way to became merged. This would be the second major step in Hutchison's direction plan, after it merged Orange and T-Mobile into EE in 2010. Telefonica bought O2 for 18 billion pounds in 2005, however at that time there were other assets in Ireland and Germany. Reportedly BT made an offer to buy O2 in November 2014 for about 6 billion pounds.

Still, O2 has a notable role in the UK market. Because it was the first carrier to have the iPhone when it first launched, and holding an initial exclusive on that similar to AT&T in the U.S., this gives the company a very large share of the UK’s iPhone users today. Telefonica wants to get benefits from a sale of O2 in the UK to invest more in emerging markets. Based in Spain, Telefonica has been steadily building up its business in South America and looking to get more market share in countries of Latin America.

As 3 Hutchison purchases O2, this merger would create the UK’s biggest carrier. Together they would have 41% of the market with 31 million subscribers; EE would have 32%; and Vodafone would have 26%. Currently Three is the newest and smallest of the mobile carriers with 8 million subscribers out of a total of over 83 million mobile users in the UK. But it offers lower prices for voice and data services than any of its present competitors.

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