Three predicted to bid for O2 UK in 2014
A couple of years ago there were 5 main UK mobile operators in the UK, but that became 4 when Orange and T-Mobile merged to become EE. That left EE, O2, Three and Vodafone as the UK's four main mobile operators.
The latest development is that this could soon reduce to 3 operators as Three are reported to be considering a bid for O2 UK. This follows news that Three has made a bid for O2 in Ireland, which is awaiting approval by the European Commission.
The Guardian spoke to Three chief executive David Dyson who commented "Under the right circumstances the UK could operate competitively with three or with five, predicting a round of consolidation in Europe from 2014. Any mergers would have to ensure balance in the market, leaving a trio of strong players at the end of the process”.
Three has 7.8 million customers with a market share of ten percent and remains the smallest of the mobile operators. Three are owned by Hutchinson Whampoa in Hong Kong which would provide the financial backing for the deal.
There are many things to consider for such a merger to take place. The first obstacle to overcome would be approval from Ofcom. Just like with the merger of Orange and T-Mobile into EE, Three and O2 would need to allay fears that the customer could suffer due to a lack of competitiveness which could result in higher costs.
In a separate article CCS Insight, a leading firm of Analysts, predict that Three will acquire O2 in 2014 and become a leading European operator. CCS say that O2’s owners Telefonica will sell O2 UK to lower its debts.
3G will track the developments on the above and advise as more news breaks.