Owners of EE and O2 are considering their options as both BT and Three UK are interested in buying them out
Last week rumours about talks between operators were confirmed. Both O2 and EE were approached by BT representatives as it seems that the British telecommunications company wants to come back to the mobile market. Analysts estimate that EE is the largest network in the UK with one-third of the market in their hands, while O2 is just behind it with a quarter of the market. The potential value of these main operators is £10bn and £9bn respectively. EE is owned by Deutsche Telekom and Orange and these two shareholders were looking into many options, however, this is the first time that a possible sale is seriously considered. The other operator, who is up for grabs, is O2. If BT bought it, then the history would make a circle as O2 was originally cut out of BT Group in 2001 which was then operating in the red. A few years later it was bought by French Telefonica. There has not been any official statement released by BT so what we know is that both main operators have talked with BT but they are probably secretly negotiating.
But the situation got a bit more complicated as Hutchison Whampoa, Three UK’s parent company, also got interested into expanding their market share by acquiring either O2 or EE. This Chinese multinational company has been recently spending a lot of money on buy-outs and merger. For example, this year it has bought O2 Ireland. With two potential buyers it seems that we might soon see a big change on the telecoms market
Obviously the talks are in preliminary stages and such a big acquisition had to be approved by Ofcom. The watchdog once stated that having four main operators creates a healthy market in the UK. This means that Hutchison Whampoa may have to worry about whether it would be allowed to conclude such a purchase. On the other hand, BT’s return to the market would definitely create a new powerful competition on the market but would not disturb the balance and we would still have four independent operators.