Telefonica considers selling O2

Everything Goes · 21-11-2014, 12:57

It has been talked about for a while that O2 UK may be put up for sale. Looks like they are considering it!

Quote:

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.

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.”

http://www.ispreview.co.uk/index.php...2-uk-sale.html

Thine Wonk · 21-11-2014, 18:02

I wonder if BT would buy it, that would be a full turnaround and I think BT would be interested too.

enapace · 21-11-2014, 18:28

Honestly a couple of years ago BT might of been interested in it but think honestly now they will be happy with there hybrid 4G/WiFi/Roaming set up they are implementing. Far cheaper for them expect we will see perhaps see Three UK buying them would be a good move for them getting a nice amount of low band spectrum.

Thine Wonk · 21-11-2014, 19:31

Hutchison would have what was O2 UK and Ireland then.

Nick_London · 21-11-2014, 21:12

Count BskyB out, they may not want to spend between £4 billion to £10 billion on a mobile network.

Possible buyers:

BT
Vodafone
Hutchison 3G
AT&T
Telecom Italia
Cable and Wireless communications(no UK operations)
Verizon

Yes that's right, Vodafone could and can afford to buy O2 or at least even a merger similar to EE.

Hutchison possibly might be interested however, it would not make sense considering that they already struggle to attract customers and half to sell products well below competitors prices, would it be worthwhile buying O2 for billions whilst it has no fixed line convergence?

Verizon could be interested, they already have fixed line and fibre infrastructure in the UK which was formerly MCI Worldcom and maybe looking to expand into Europe.

BT would benefit a lot with its own network and would also inherit O2 wifi, this will fit into BT's wifi portfolio and 4G expansion very well. O2''s 4G spectrum is relatively small and combined with BT's would give it the fuel to provide better and a wider range of 4G.

Cable and Wireless communications does not have any operations in the UK and no longer operates in Guernsey,Jersey,falkland,St Helena,Isle of Man and Monaco. It mostly operates in the Caribbean. It may well want to expand into the UK

moox · 21-11-2014, 21:28

Quote:

Originally Posted by Thine Wonk

I wonder if BT would buy it, that would be a full turnaround and I think BT would be interested too.

It's a bit of a basketcase of a network - would BT want to put in the investment it sorely needs to bring it into the 21st century?

moox · 21-11-2014, 21:30

Quote:

Originally Posted by Nick_London

Count BskyB out, they may not want to spend between £4 billion to £10 billion on a mobile network.

Possible buyers:

BT
Vodafone
Hutchison 3G
AT&T
Telecom Italia
Cable and Wireless communications(no UK operations)
Verizon

Verizon or AT&T might not want it, they wouldn't be able to impose their anticompetitive practices and vendor lock in that they get in the US.

I think there isn't a chance in hell that Vodafone would be allowed to buy it - aside from concerns about moving to 3 network operators, Vodafone would likely be deemed to have too much resulting power. Hutchison might struggle too.

Not sure if CWC have the cash, I seem to remember them being not flush with cash before they split into separate companies

maverickjesus · 21-11-2014, 21:35

None of those are really viable buyers, which is half the problem - Telefonica have been a financial basketcase for a long time now, they aren't going to get value for O2 and any potential buyers have known this for a long time. Vodafone buying it wouldn't be a goer as I think they would have well over half of all the mobile customers in the UK. You are more likely to get a out of left field candidate like Liberty Global or China Mobile than any of the obvious players.

d123 · 21-11-2014, 22:10

It was exactly a year ago that there was speculation of Hutchison buying O2.

http://forums.digitalspy.co.uk/showthread.php?t=1910006

roadshow2006 · 21-11-2014, 22:18

If Hutchinson got it would Three then have 2G again?

Everything Goes · 21-11-2014, 22:34

Quote:

Originally Posted by roadshow2006

If Hutchinson got it would Three then have 2G again?

I think the real bonus would be having a 3G signal on O2 instead of good old GPRS

Everything Goes · 21-11-2014, 22:41

Quote:

Originally Posted by d123

It was exactly a year ago that there was speculation of Hutchison buying O2.

http://forums.digitalspy.co.uk/showthread.php?t=1910006

Yes there was some speculation about that last year possibly spurred on by Three (Hutchinson) buying O2 in the Republic of Ireland.

The quote from Telefonica does suggest they are actively considering the possibility of selling it off.

moox · 21-11-2014, 22:41

Quote:

Originally Posted by roadshow2006

If Hutchinson got it would Three then have 2G again?

You could argue that 3 doesn't really need to buy the whole network to obtain a marginal increase in coverage where O2 2G exists and 3 3G doesn't - and as the poster above says, it'd probably benefit the O2 users more

It doesn't sound as if Hutchison would really get much out of the purchase. Customers, a bit of spectrum and a network that is substantially lower quality than the one they already own. Doesn't sound like an amazing deal

Gigabit · 21-11-2014, 22:49

Hutchinson looks like the most likely company to buy it.

AT&T are eying up Vodafone so they won't be interested, Verizon just got rid of AT&T so I doubt they're in a position to buy it.

Vodafone would never be allowed to buy it anyway, that would result in a text book monopoly. However, O2 and Three would not be a monopoly (very similar to Orange and T-Mobile pre-merger?).

Gigabit · 21-11-2014, 22:50

Quote:

Originally Posted by moox

You could argue that 3 doesn't really need to buy the whole network to obtain a marginal increase in coverage where O2 2G exists and 3 3G doesn't - and as the poster above says, it'd probably benefit the O2 users more

It doesn't sound as if Hutchison would really get much out of the purchase. Customers, a bit of spectrum and a network that is substantially lower quality than the one they already own. Doesn't sound like an amazing deal

It's quite useful spectrum though to be fair. 900MHz 3G, 1800MHz 3G, 800MHz 4G.

Puts them on a similar playing field to EE!

The Lord Lucan · 22-11-2014, 01:39

Out of that list: For me it's between BT & Hutchinson.. However there are issues for either if they bought them..

enapace · 22-11-2014, 02:21

Very useful for Three there new strategy seems to be according to Jabba national 800MHz being able to run 2x15MHz of 800MHz would be pretty awesome. Plus possibility of 2x5MHz or 2x10MHz 4G 2100MHz for additional capacity.

noise747 · 22-11-2014, 09:48

it is this bundling thing again. Not all of us want services bundled together, some of us just want our services from different suppliers.
Something that in the fixed line broadband markets is getting difficult to do.

Jack_Wilson2 · 22-11-2014, 10:22

Quote:

Originally Posted by roadshow2006

If Hutchinson got it would Three then have 2G again?

Three UK ditched O2 though back in late 2006.... (Depending on the reasons they stopped using them - They may not be a potential buyer then again they could always improve the network)

Zee_Bukhari · 22-11-2014, 12:58

Hutchinson getting hold of O2 would be great for their very rural coverage and improving their indoor coverage, but it would cost them a considerable amount to upgrade O2's ancient network.

Thine Wonk · 22-11-2014, 13:52

Quote:

Originally Posted by noise747

it is this bundling thing again. Not all of us want services bundled together, some of us just want our services from different suppliers.
Something that in the fixed line broadband markets is getting difficult to do.

It is not about what you want though, this discussion is about what makes the most sense from a business perspective. Can a large scale market leader like O2 compete if Virgin, BT and others all crowd around them playing multiplay and offering consumers big discounts seemingly on mobile but subsidised elsewhere, especially with O2's cost setup being a premium provider.

You will always be free to choose personally to have different suppliers, but if you do that you are potentially paying more, especially if you're buying from premium / higher end of the market companies like O2.

Thine Wonk · 22-11-2014, 14:29

Oh by the way Vodafone announced this earlier in the month, which probably has something to do with it. O2 sold it's broadband division to Sky, so now Sky, Virgin, BT AND Vodafone will all be competing for TV, mobile and fixed line.

http://www.bbc.co.uk/news/business-30000481

pinkllama · 22-11-2014, 17:00

o2 got their 4g at a cut down price as it came with a rollout obligation of something like 97 or 98% indoor coverage by 2017 i think.

could they be selling as they don't have the cash to get to that level of coverage?

Everything Goes · 22-11-2014, 17:11

Quote:

Originally Posted by pinkllama

o2 got their 4g at a cut down price as it came with a rollout obligation of something like 97 or 98% indoor coverage by 2017 i think.

could they be selling as they don't have the cash to get to that level of coverage?

The coverage obligation is not actually a 4G obligation at all its only to provide sustained downlink speed of not less than 2 Mbps which 3G is quite capable of doing. Nice little get out clause!

(a) The Licensee shall by no later than 31 December 2017 provide, and thereafter maintain, an electronic communications network that is capable of providing, with 90% confidence, a mobile telecommunications service with a sustained downlink speed of not less than 2 Mbps when that network is lightly loaded, to users

users:
(i) in an area within which at least:
a. 98% of the population of the United Kingdom lives, and
b. 95% of the population of each of England, Wales, Scotland and Northern Ireland lives; and
(ii) at indoor locations that meet the condition specified in paragraph 6(b)(ii) of this Schedule, which are within any residential premises within the area specified in paragraph 6(a)(i).

http://stakeholders.ofcom.org.uk/bin...rification.pdf

http://forums.digitalspy.co.uk/showthread.php?t=1937180

moox · 22-11-2014, 17:12

Quote:

Originally Posted by Everything Goes

The coverage obligation is not actually a 4G obligation at all its only to provide sustained downlink speed of not less than 2 Mbps which 3G is quite capable of doing. Nice little get out clause!

(a) The Licensee shall by no later than 31 December 2017 provide, and thereafter maintain, an electronic communications network that is capable of providing, with 90% confidence, a mobile telecommunications service with a sustained downlink speed of not less than 2 Mbps when that network is lightly loaded, to users

users:
(i) in an area within which at least:
a. 98% of the population of the United Kingdom lives, and
b. 95% of the population of each of England, Wales, Scotland and Northern Ireland lives; and
(ii) at indoor locations that meet the condition specified in paragraph 6(b)(ii) of this Schedule, which are within any residential premises within the area specified in paragraph 6(a)(i).

http://stakeholders.ofcom.org.uk/bin...rification.pdf

http://forums.digitalspy.co.uk/showthread.php?t=1937180

I'm assuming that O2 doesn't actually meet those obligations yet?

21-11-2014, 12:57	#1
Everything Goes Forum Member Join Date: Mar 2002 Location: In the future.... Posts: 11,259	Telefonica considers selling O2 It has been talked about for a while that O2 UK may be put up for sale. Looks like they are considering it! Quote: 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. 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.” http://www.ispreview.co.uk/index.php...2-uk-sale.html

21-11-2014, 18:02	#2
Thine Wonk Forum Member Join Date: Mar 2009 Posts: 14,577	I wonder if BT would buy it, that would be a full turnaround and I think BT would be interested too.

21-11-2014, 18:28	#3
enapace Forum Member Join Date: Mar 2013 Posts: 4,249	Honestly a couple of years ago BT might of been interested in it but think honestly now they will be happy with there hybrid 4G/WiFi/Roaming set up they are implementing. Far cheaper for them expect we will see perhaps see Three UK buying them would be a good move for them getting a nice amount of low band spectrum.

21-11-2014, 19:31	#4
Thine Wonk Forum Member Join Date: Mar 2009 Posts: 14,577	Hutchison would have what was O2 UK and Ireland then.

21-11-2014, 21:12	#5
Nick_London Forum Member Join Date: Sep 2007 Posts: 485	Count BskyB out, they may not want to spend between £4 billion to £10 billion on a mobile network. Possible buyers: BT Vodafone Hutchison 3G AT&T Telecom Italia Cable and Wireless communications(no UK operations) Verizon Yes that's right, Vodafone could and can afford to buy O2 or at least even a merger similar to EE. Hutchison possibly might be interested however, it would not make sense considering that they already struggle to attract customers and half to sell products well below competitors prices, would it be worthwhile buying O2 for billions whilst it has no fixed line convergence? Verizon could be interested, they already have fixed line and fibre infrastructure in the UK which was formerly MCI Worldcom and maybe looking to expand into Europe. BT would benefit a lot with its own network and would also inherit O2 wifi, this will fit into BT's wifi portfolio and 4G expansion very well. O2''s 4G spectrum is relatively small and combined with BT's would give it the fuel to provide better and a wider range of 4G. Cable and Wireless communications does not have any operations in the UK and no longer operates in Guernsey,Jersey,falkland,St Helena,Isle of Man and Monaco. It mostly operates in the Caribbean. It may well want to expand into the UK

21-11-2014, 21:28	#6
moox Forum Member Join Date: Oct 2004 Posts: 14,645	Quote: Originally Posted by Thine Wonk I wonder if BT would buy it, that would be a full turnaround and I think BT would be interested too. It's a bit of a basketcase of a network - would BT want to put in the investment it sorely needs to bring it into the 21st century?

21-11-2014, 21:30	#7
moox Forum Member Join Date: Oct 2004 Posts: 14,645	Quote: Originally Posted by Nick_London Count BskyB out, they may not want to spend between £4 billion to £10 billion on a mobile network. Possible buyers: BT Vodafone Hutchison 3G AT&T Telecom Italia Cable and Wireless communications(no UK operations) Verizon Verizon or AT&T might not want it, they wouldn't be able to impose their anticompetitive practices and vendor lock in that they get in the US. I think there isn't a chance in hell that Vodafone would be allowed to buy it - aside from concerns about moving to 3 network operators, Vodafone would likely be deemed to have too much resulting power. Hutchison might struggle too. Not sure if CWC have the cash, I seem to remember them being not flush with cash before they split into separate companies

21-11-2014, 21:35	#8
maverickjesus Forum Member Join Date: Aug 2013 Posts: 100	None of those are really viable buyers, which is half the problem - Telefonica have been a financial basketcase for a long time now, they aren't going to get value for O2 and any potential buyers have known this for a long time. Vodafone buying it wouldn't be a goer as I think they would have well over half of all the mobile customers in the UK. You are more likely to get a out of left field candidate like Liberty Global or China Mobile than any of the obvious players.

21-11-2014, 22:10	#9
d123 Forum Member Join Date: Jul 2007 Posts: 3,993	It was exactly a year ago that there was speculation of Hutchison buying O2. http://forums.digitalspy.co.uk/showthread.php?t=1910006

21-11-2014, 22:18	#10
roadshow2006 Forum Member Join Date: Jul 2005 Posts: 1,581	If Hutchinson got it would Three then have 2G again?

21-11-2014, 22:34	#11
Everything Goes Forum Member Join Date: Mar 2002 Location: In the future.... Posts: 11,259	Quote: Originally Posted by roadshow2006 If Hutchinson got it would Three then have 2G again? I think the real bonus would be having a 3G signal on O2 instead of good old GPRS

21-11-2014, 22:41	#12
Everything Goes Forum Member Join Date: Mar 2002 Location: In the future.... Posts: 11,259	Quote: Originally Posted by d123 It was exactly a year ago that there was speculation of Hutchison buying O2. http://forums.digitalspy.co.uk/showthread.php?t=1910006 Yes there was some speculation about that last year possibly spurred on by Three (Hutchinson) buying O2 in the Republic of Ireland. The quote from Telefonica does suggest they are actively considering the possibility of selling it off.

21-11-2014, 22:49	#14
Gigabit Forum Member Join Date: Aug 2014 Location: United Kingdom Posts: 2,887	Hutchinson looks like the most likely company to buy it. AT&T are eying up Vodafone so they won't be interested, Verizon just got rid of AT&T so I doubt they're in a position to buy it. Vodafone would never be allowed to buy it anyway, that would result in a text book monopoly. However, O2 and Three would not be a monopoly (very similar to Orange and T-Mobile pre-merger?).

21-11-2014, 22:50	#15
Gigabit Forum Member Join Date: Aug 2014 Location: United Kingdom Posts: 2,887	Quote: Originally Posted by moox You could argue that 3 doesn't really need to buy the whole network to obtain a marginal increase in coverage where O2 2G exists and 3 3G doesn't - and as the poster above says, it'd probably benefit the O2 users more It doesn't sound as if Hutchison would really get much out of the purchase. Customers, a bit of spectrum and a network that is substantially lower quality than the one they already own. Doesn't sound like an amazing deal It's quite useful spectrum though to be fair. 900MHz 3G, 1800MHz 3G, 800MHz 4G. Puts them on a similar playing field to EE!

22-11-2014, 01:39	#16
The Lord Lucan Forum Member Join Date: Apr 2005 Location: Scotland Posts: 4,966	Out of that list: For me it's between BT & Hutchinson.. However there are issues for either if they bought them..

22-11-2014, 02:21	#17
enapace Forum Member Join Date: Mar 2013 Posts: 4,249	Very useful for Three there new strategy seems to be according to Jabba national 800MHz being able to run 2x15MHz of 800MHz would be pretty awesome. Plus possibility of 2x5MHz or 2x10MHz 4G 2100MHz for additional capacity.

22-11-2014, 09:48	#18
noise747 Forum Member Join Date: Dec 2007 Location: Herefordshire Posts: 22,810	it is this bundling thing again. Not all of us want services bundled together, some of us just want our services from different suppliers. Something that in the fixed line broadband markets is getting difficult to do.

22-11-2014, 10:22	#19
Jack_Wilson2 Forum Member Join Date: Mar 2014 Location: Yorkshire, United Kingdom Posts: 561	Quote: Originally Posted by roadshow2006 If Hutchinson got it would Three then have 2G again? Three UK ditched O2 though back in late 2006.... (Depending on the reasons they stopped using them - They may not be a potential buyer then again they could always improve the network)

22-11-2014, 12:58	#20
Zee_Bukhari Forum Member Join Date: Apr 2013 Posts: 1,319	Hutchinson getting hold of O2 would be great for their very rural coverage and improving their indoor coverage, but it would cost them a considerable amount to upgrade O2's ancient network.

22-11-2014, 13:52	#21
Thine Wonk Forum Member Join Date: Mar 2009 Posts: 14,577	Quote: Originally Posted by noise747 it is this bundling thing again. Not all of us want services bundled together, some of us just want our services from different suppliers. Something that in the fixed line broadband markets is getting difficult to do. It is not about what you want though, this discussion is about what makes the most sense from a business perspective. Can a large scale market leader like O2 compete if Virgin, BT and others all crowd around them playing multiplay and offering consumers big discounts seemingly on mobile but subsidised elsewhere, especially with O2's cost setup being a premium provider. You will always be free to choose personally to have different suppliers, but if you do that you are potentially paying more, especially if you're buying from premium / higher end of the market companies like O2.

22-11-2014, 14:29	#22
Thine Wonk Forum Member Join Date: Mar 2009 Posts: 14,577	Oh by the way Vodafone announced this earlier in the month, which probably has something to do with it. O2 sold it's broadband division to Sky, so now Sky, Virgin, BT AND Vodafone will all be competing for TV, mobile and fixed line. http://www.bbc.co.uk/news/business-30000481

DS Forums

Telefonica considers selling O2

22-11-2014, 17:00	#23
pinkllama Forum Member Join Date: Sep 2012 Posts: 61	o2 got their 4g at a cut down price as it came with a rollout obligation of something like 97 or 98% indoor coverage by 2017 i think. could they be selling as they don't have the cash to get to that level of coverage?

22-11-2014, 17:11	#24
Everything Goes Forum Member Join Date: Mar 2002 Location: In the future.... Posts: 11,259	Quote: Originally Posted by pinkllama o2 got their 4g at a cut down price as it came with a rollout obligation of something like 97 or 98% indoor coverage by 2017 i think. could they be selling as they don't have the cash to get to that level of coverage? The coverage obligation is not actually a 4G obligation at all its only to provide sustained downlink speed of not less than 2 Mbps which 3G is quite capable of doing. Nice little get out clause! (a) The Licensee shall by no later than 31 December 2017 provide, and thereafter maintain, an electronic communications network that is capable of providing, with 90% confidence, a mobile telecommunications service with a sustained downlink speed of not less than 2 Mbps when that network is lightly loaded, to users users: (i) in an area within which at least: a. 98% of the population of the United Kingdom lives, and b. 95% of the population of each of England, Wales, Scotland and Northern Ireland lives; and (ii) at indoor locations that meet the condition specified in paragraph 6(b)(ii) of this Schedule, which are within any residential premises within the area specified in paragraph 6(a)(i). http://stakeholders.ofcom.org.uk/bin...rification.pdf http://forums.digitalspy.co.uk/showthread.php?t=1937180

22-11-2014, 17:12	#25
moox Forum Member Join Date: Oct 2004 Posts: 14,645	Quote: Originally Posted by Everything Goes The coverage obligation is not actually a 4G obligation at all its only to provide sustained downlink speed of not less than 2 Mbps which 3G is quite capable of doing. Nice little get out clause! (a) The Licensee shall by no later than 31 December 2017 provide, and thereafter maintain, an electronic communications network that is capable of providing, with 90% confidence, a mobile telecommunications service with a sustained downlink speed of not less than 2 Mbps when that network is lightly loaded, to users users: (i) in an area within which at least: a. 98% of the population of the United Kingdom lives, and b. 95% of the population of each of England, Wales, Scotland and Northern Ireland lives; and (ii) at indoor locations that meet the condition specified in paragraph 6(b)(ii) of this Schedule, which are within any residential premises within the area specified in paragraph 6(a)(i). http://stakeholders.ofcom.org.uk/bin...rification.pdf http://forums.digitalspy.co.uk/showthread.php?t=1937180 I'm assuming that O2 doesn't actually meet those obligations yet?