Mobile Operator Three UK Counters BT by Mooting Own Bid for EE and O2

Mobile Operator Three UK Counters BT by Mooting Own Bid for EE and O2 - ISPreview UK
Hold on to your hats because Three UK’s Hong Kong based parent, Hutchison Whampoa Ltd., has reportedly decided to counter BT’s preliminary talks to buy O2 or EE by preparing to make a similar bid of its own. Suddenly there’s the prospect that BT might need to pay more than it planned.

The move would not be as surprising as it might first sound because Three UK’s CEO, David Dyson, has previously hinted that “under the right circumstances” the operator might be interested in a merger or outright purchase of rival O2 (here). As the smallest mobile operator Three UK doesn’t have the clout to nab O2, although parent Hutchison Whampoa has a lot more flexibility in the financial department.

According to Reuters, talks between Three UK and the two operators are already underway and a formal bid could be tabled before the end of this year. Meanwhile BT also appears to be working towards a similar timetable, which is likely to ignite a high-level bidding war and could unsettle some predictions about the probable outcome of BT’s mobile gamble.

In both instances any purchase of EE is likely to be the most complex option given their extensive spectrum ownership and general market size, not to mention the fact that EE is still working to complete the prior merger of Orange and T-Mobile into their single brand.

On the other hand Three UK already has a network sharing agreement with EE through the umbrella organisation Mobile-Broadband Network Limited (MBNL), which might create some problems if they picked O2 instead.

At the same time Three UK has so far shown zero interest in launching non-mobile services like TV, home phone and or home broadband, thus the benefit of gobbling O2 might be less than grabbing a ready-made quad play provider via EE and staying competitive in an increasingly converged market.