Rumour Mill: Hutchison mulls bid for EE or O2 UK

Speculation about the future structure of the UK telecoms market reached fever pitch this week as some industry watchers placed their bets on whether BT would buy EE or O2 UK, while others suggested Hutchison Whampoa could enter the race for one of the two mobile operators.

Citing unnamed sources close to the matter, Reuters said the Hong Kong-based group, which already owns Three UK, could put forward a bid for EE or O2 UK by the end of the year.

It was also suggested that if BT opted to buy EE, then Telefónica might be persuaded to sell its O2 UK unit to Hutchison in order to reduce debt, even though the merger of the two mobile operators would likely face a lengthier competition review than a merger of O2 UK with fixed-line provider BT.

Hutchison has a track record of snapping up other mobile operators in Europe, having already acquired Orange Austria and O2 Ireland to boost its existing operations in those markets. The Three Group has also not typically pursued the fixed-mobile convergence path, instead focusing on providing large mobile data bundles to its subscribers.

Meanwhile separate reports on Friday also claimed that Telefónica is seeking a "global alliance" with BT: Reuters said the Spanish company's chairman Cesar Alierta made comments to this effect on Monday.

In an emailed statement to FierceWireless:Europe, Telefónica made no reference to such comments; an O2 UK spokesman merely reiterated that although conversations with BT are taking place, "those are at a highly preliminary stage and there can be no certainty that any transaction may occur with such company".

EE parent companies Orange and Deutsche Telekom also confirmed this week that they are in early discussions with BT on a possible sale of their jointly owned UK business.

Sources told Reuters that a purchase of EE by BT would make sense because of the high quality of the asset and the fact that EE already provides mobile network access to BT under a wholesale arrangement. However, Reuters noted that analysts value O2 UK at about £9.4 billion (€11.8 billion/$14.7 billion), which would make it a more digestible option than EE, valued at £11 billion.

For more:
- see this Reuters article
- see this separate Reuters article

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