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    Telefonica UK Floats Tentative Prospect of an O2 Mobile Sale

    This is a discussion on Telefonica UK Floats Tentative Prospect of an O2 Mobile Sale within the O2 / Be Customer Information forums, part of the Sky Broadband help and support category; Telefonica UK Floats Tentative Prospect of an O2 Mobile Sale - ISPreview UK The owner of mobile operator O2 (Telefonica), ...

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      Telefonica UK Floats Tentative Prospect of an O2 Mobile Sale

      Telefonica UK Floats Tentative Prospect of an O2 Mobile Sale - ISPreview UK
      The owner of mobile operator O2 (Telefonica), which last year sold their home broadband and phone customers to BSkyB (Sky Broadband) after failing to make a success of the business (here), has warned that if more of the United Kingdom’s telecoms market moved towards bundled services then it may have to consider putting up the FOR SALE sign.

      Historically mobile operators haven’t had much luck in the consumer fixed line market. For example, EE’s home broadband only recently returned to growth after struggling for years under Orange UK, while Vodafone gave it a go until selling customers off to PlusNet in 2011 (here) and of course O2 itself failed to make it work and last year sold out to Sky. Meanwhile Three UK has kept to a purely mobile focus.

      In nearly all of these cases some of the root causes of failure can be traced back to a combination of factors, such as a lack of advertising or an inability to understand what their customers wanted and to keep their products up-to-date with what others in the market were offering (e.g. O2 dragged their feet for years over FTTC, despite clear demand among their customers).

      Funnily enough O2’s fixed line service was actually quite good (thanks to the BE Broadband LLU network), yet they slowly made their packages more restrictive and expensive, which they also did at a time when rivals were doing the opposite. Meanwhile Vodafone’s recent decision to move back into the consumer fixed line broadband market (here), which is itself a response to BT’s move into the mobile sector, appears to be making O2 nervous.

      Jose Maria Alvarez-Pallete, Telefonica’s COO, said (Reuters):

      If the market goes convergent then we will need to evaluate our options … In the landscape as it stands today we are in good shape, but the position taken by BT when and if it launches in mobile will be a key event. Virgin and others already have converged offers, but we don’t see a major appetite from consumers. So we’ll see how that evolves.”
      In fairness bundles are nothing new and their prevalence has been slowly growing over the past few years. Today EE, Virgin Media and TalkTalk are already quad-play (broadband, tv, mobile and phone) providers. Next year BT and Vodafone will join that pack and Sky Broadband are widely expected to do the same by adding a mobile solution of their own, most likely through a deal with existing partner Vodafone.

      As a result of all this O2 and Three UK will be left as the only two mobile-dedicated operators in the market, although it remains to be seen how successful Vodafone and BT’s respective offers will be. We strongly suspect that BT’s market reach, hybrid 4G/WiFi technology approach and advertising prowess will enable them to break through. By comparison Vodafone’s history in the home broadband sector makes us sceptical.

      Lest we not forget that O2 recently signed a deal to become TalkTalk’s new MVNO partner, replacing Vodafone. Sometimes not having a quad-play solution can have its own advantages. But O2 are still right to be worried about the future and they’re unlikely to adapt by taking a second stab at the home broadband market so soon after leaving it.

      Much will probably depend upon just how much of a success BT and Vodafone’s rival services actually become and we suspect that it may take a while for both to build themselves up. So for now it looks as if O2 will simply watch and wait to see what happens, much like the rest of us.


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      Re: Telefonica UK Floats Tentative Prospect of an O2 Mobile Sale

      BT are now in talks to buy back O2. Sky are going to be left out in the cold as far as '4 play' is concerned unless they come to an arrangement or buy out Vodafone.

      TomD


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      Re: Telefonica UK Floats Tentative Prospect of an O2 Mobile Sale

      Hmmm... I had been watching this story develop today.

      It would be quite funny at BT's expense if Sky were to buy out the mobile business from Telefonica too.

      Having just purchased Sky Italia and Sky Deutschland, the coffers might be a little short of cash right now though.

      Vodafone have a lot of money in the bank at the moment. In theory they have enough to purchase Sky. Their recent deal with Sky would indicate that the purchase of Sky by Vodafone for now is not under consideration, but there were rumours of it at one point.

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      Re: Telefonica UK Floats Tentative Prospect of an O2 Mobile Sale

      Not sure Vodafone or sky will be buying each other out, it will just be a close partnership.
      Vodafone will be basing their tv offering on a sky now tv setup in spring 2015, adding onto the current Vodafone tie up with sky for 4g customers and sky mobile tv. This was in the press around the 18th November.
      Vodafone have also started offering their 4g customers now tv, got sent the details/offering Myself.
      Think for next year sky will use their relationship with Vodafone and use the Vodafone network for a sky own branded mobile offering.

      The one advantage currently I see is that the new BT mobile offering will be using home routers for home based mobile network traffic, not sure if the sky router is capable of this yet.
      BT are doing this for business with the BT one phone, not sure how popular this is yet though.
      On this, think we may be seeing mobile usage increasing at home and landline phone usage reduced.
      Last edited by lettice; 25-11-14 at 09:09 AM.

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      Re: Telefonica UK Floats Tentative Prospect of an O2 Mobile Sale

      Found an interesting article this morning on all this
      If BT is throwing £10bn at mobile, the corporate dance has started | Business | The Guardian

      Feel with this new 'Four Play' move, that deciding which way to turn now for phone, broadband, mobile and tv is becoming so complicated.
      Just could not resist...



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      Re: Telefonica UK Floats Tentative Prospect of an O2 Mobile Sale

      Considering that both O2 and Vodafone appear to have the least coverage of the UK than EE and Three, neither Sky nor BT will have the ideal solution.

      Telefonica UK Floats Tentative Prospect of an O2 Mobile Sale-mobile_operator_3g_and_4g_uk_coverage_map_2014.jpg

      Hopefully each network will invest more over the next few years and increase this a great deal.

      As for the Sky Hub being able to work with mobile networks, to some extent this is already possible. Using the O2 app a friend is able to his mobile via his 6mb Sky ADSL connection.

      Of course an IP phone would be a nice addition, which is something that BT has had on it's HomeHub v2 (not sure about the later ones) but this ate into the potential bandwidth on an ADSL connection.

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      Re: Telefonica UK Floats Tentative Prospect of an O2 Mobile Sale

      I read somewhere recently that quad-play isn't something that's gaining much ground in the current UK market at present, so I don't see that as much of a priority for any provider.

      EE are also about the launch a full WiFi calling/texting service (without the use of any apps) which will work with all UK ISPs/routers. BT are rumoured to be doing something similar as well as they are using EE infrastructure for their current mobile service.

      Rumours are the BT are also sniffing around EE as well as apparently Deutsche Telekom AG are looking to offload their share of the UK's EE and the T-Mobile US networks. That would but BT in a very strong position if they snapped up EE.

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      Re: Telefonica UK Floats Tentative Prospect of an O2 Mobile Sale

      Both EE and Vodafone are late with their updates to allow calls to be routed through a WiFi AP. It was mentioned earlier this year that they were expected to launch in September. It will be beneficial for all though when it does happen.

      Quad play can be both good and bad. Having just the one bill will be useful for housekeeping and if there are associated discounts, it will be appreciated by the customers. On the downside, if something goes wrong, then all four services can be lost in one go.

      The 'something going wrong' could be a problem with a bill or it could be issues with the company. Sure both BT and Sky are large, but we've seen a couple of smaller mobile firms go under this year.

      If BT were to purchase O2 back, then it will be interesting to know if they were to continue looking into EE. The regulators might not be too happy if they were, but it would be interesting. Of course there is nothing stopping a new player entering the market neither.

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      Re: Telefonica UK Floats Tentative Prospect of an O2 Mobile Sale

      I guess things are going to become very interesting...


      EE admits it is BT's 'mystery' second target - Telegraph
      EE admits it is BT's 'mystery' second target

      Deutsche Telekom and Orange, who jointly own EE, said they are in "exploratory discussions" with BT

      EE admitted on Wednesday morning that it is the second mobile operator in deal talks with BT.

      It was widely assumed that BT was referring to EE when it revealed it was in acquisition talks with O2-owner Telefonica and one other operator on Monday.

      EE's joint shareholders Deutsche Telekom and Orange said they were in "exploratory discussions" with BT but added that it was "too early to state whether any transaction may occur".

      The pair added that they "regularly analyse the development of the market in which EE operates, evaluating various strategic options which have the potential to create value for EE's shareholders and strengthen the market position of EE".

      A purchase of either O2 or EE would cement BT's position as Britain’s most powerful provider of telecoms and media services and lay the ground for a round of further mergers.

      Both O2 and EE - Britain's biggest mobile operator - are seeking to offload their UK operations while BT is preparing to re-enter the consumer mobile market next year.

      City sources have said that O2 - which BT span off more than a decade ago - would be a more attractive takeover for BT than EE. Several telecoms banking sources cited BT and O2’s shared history, readily available synergies resulting from a 10-year data carriage deal and the strength of the mobile operator’s brand.

      On the other hand, EE has already signed a deal with BT to provide wholesale 4G network access for its mobile launch next year.

      Analysts said full ownership of a mobile network would put BT in the lead in the industry’s rapid shift towards ‘quad-play’ packages of broadband, home phone, mobile and television. It is already the biggest fixed-line operator and has invested £2bn in sports rights to loosen Sky’s grip on the pay-TV market.

      It would also give BT an instant nationwide retail footprint comprising hundreds of stores to sell the benefits of ‘quad-play’ to British consumers, who have so far given the idea a cool reception. Telecoms companies see adding more services to packages as a way to increase customer loyaly.

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      Re: Telefonica UK Floats Tentative Prospect of an O2 Mobile Sale

      Adding a little more to this simmering mixing pot, Talk Talk have announced they are switching their MVNO mobile phone service from Vodafone to O2. Be interesting if BT did purchase O2!!!
      Scubbie likes this.

     

     
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