Three to buy O2 in £10bn deal
It has been revealed that the richest person in Asia, Li Ka-shing, is negotiating to buy O2 from Telefonica for around £10bn.
The Hong Kong billionaire owns Hutchinson Whampoa, which already owns mobile phone network Three, and plans to combine Three with O2 to create the largest mobile provider in the UK. The competition regulators would closely scrutinise such a deal, however, as the number of main operators in the UK would be reduced to three and this may not be in the best interest of consumers.
There is already some movement within the mobile phone industry, as BT has plans to buy EE. Competition regulators in Brussels would have to approve the deal before the purchase could go through.
The finance director of Hutchinson Whampoa, Frank Sixt, pointed out that similar deals in other countries have been approved by Brussels, even when this resulted in a reduction in the number of providers.
Concerns have been raised by others in the industry, however. Mark Newman of Ovum, the telecoms consultancy, has queried whether this deal will lead to an increase in prices for consumers and has pointed out that this has been the case in Austria, where the number of providers has been reduced.
A statement from O2 says that it is confident that any agreement will only benefit its customers and encourage both value and quality. The negotiations are expected to take place over a number of weeks.