Hutchison Whampoa is acquiringmobile operator O2 for a price that could reach £10 billion, giving a company that already owns Three an even bigger share of the British market. BT meanwhile has responded with aggressive price offerings for consumers, following its purchase of EE from Deutsche Telekom and Orange last month for £12.7 billion.
With competition in the mobile space hotting up the carriers are initially focusing on consumer services, but enterprise IT buyers should see enhanced offers available and should use the opportunity to drive hard bargains.
O2 is currently owned by Spanish multinational mobile giant Telefónica. Hutchison agreed to make an initial payment of £9.25 billion when the deal closes and pay another £1 billion when cash flow from the combined company reaches a certain level, Telefónica said.
The transaction still needs regulatory approvals and cut the number of major mobile operators in the UK from four to three.
The O2 buyout is the second big mobile deal in the U.K. this year. Last month, BT agreed to buy mobile carrier EE from Deutsche Telekom and Orange for about $19 billion and today BT launched an aggressive pricing 4G package for its existing broadband customers.
Paolo Pescatore, director, multiplay and media, CCS Insight said BT’s move was “more aggressive than many anticipated and underlines BT’s aspirations in the multiplay services market.
“BT has made the right decision to offer a range of simple and transparent packages as part of its return to the consumer mobile market. The £5 SIM only deal for existing BT broadband households is probably the best value 4G SIM only deal in the market. We believe this is a hugely attractive offer combining a low-price with inclusive content.”
John Petter, chief executive of BT Consumer, said, “We are offering customers a new type of great value mobile deal that offers more than just data, minutes and texts.
“We are offering 4G on the UK’s biggest network along with unlimited access to the most extensive wi-fi coverage via our 5m BT Wi-fi hotspot network. Plus BT Sport and a discount of up to 50 per cent on your mobile tariff if you are a BT Broadband customer.”