If approved, O2 U.K. acquisition will create country’s top mobile operator
It’s official. Confirming recent reports, Hong Kong-based Hutchison Whampoa, owner of U.K. operator Three, announced an agreement with the Spanish group Telefónica to buy its O2 U.K. business for $15.28 billion.
The deal includes $13.79 billion to be paid at closing, and then deferred upside interest sharing payments of up to $1.49 billion due after the cumulative cash flow of the combined Three and O2 U.K. business has reached an agreed threshold.
The acquisition of O2 U.K. by the owner of its rival Three will create the top mobile operator in the U.K. with nearly 33 million customers. It also will shrink the mobile market from four big players to three – a fact that could earn the deal extra regulatory scrutiny.
At the same time, BT, which provides landline, broadband and TV services in the U.K., is in the process of acquiring the country’s current leading mobile operator EE for $18.66 billion, a deal that also needs regulatory approval.
“The exact timing and next steps in each case remain somewhat unclear given the complexity of what lies ahead, but approval could take up to a year and will almost certainly be fraught,” Matthew Howett, a practice leader of regulation at Ovum, said.
The U.K.’s competition authority has already invited stakeholders to comment on the BT/EE deal, and Howett expects that approval of both deals will require some concessions in areas such as mobile backhaul, spectrum holdings and network sharing agreements.
The European Union is also expected to take a hard look at the deal between Three and O2, since it consolidates the market. The new EU competition chief, Margrethe Vestager, has already voiced concerns over any situation that reduces the number of major competitors within national borders.
More telecom news from Europe, the Middle East and Africa:
Ethio Telecom launches 4G in the capital Addis Ababa. Ethiopia’s state-owned telecom started 4G services that will initially serve 400,000 subscribers in Addis Ababa, according to Reuters. The new service is part of a $1.6 billion deal Ethio Telecom signed with vendors Huawei and ZTE to expand mobile infrastructure in the country.
Deutsche Telekom opens a “5G Haus.” Together with a host of partners, the German telco giant has started an innovation lab to spur the development of the next generation of telecom tech. The 5G Haus activities will be based across Europe in cooperation with research organizations, such as the SoftRan Initiative at Stanford University and the German Research Center for Artificial Intelligence; startups including RF DSP, Kumu Networks and Moogsoft; as well as with established vendors like Ericsson, Nokia, Samsung, ZTE, Qualcomm and Huawei.
Etisalat deploys first Ericsson radio dot system in Egypt. The operator launched the indoor system to better enable high-end services such as voice over LTE, HD voice and mobile broadband.
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