Hutchison chairman steps up fight to acquire O2 UK
05 February 2016 | Alan Burkitt-Gray
Three UK’s chairman Canning Fok is fighting back against comments from regulators in London and Brussels that hint that Three’s planned £10.25 billion takeover of O2 UK will be blocked.
He is offering a price freeze and says a combined company will step up its wholesale operations by offering “fractional shared ownership” in its network capacity.
Fok, who is also group co-managing director of CK Hutchison Holdings, which owns Three UK, has promised that, if the deal goes ahead, the combined company “will not raise the price for consumers of a voice minute, a text or a megabyte in the five years following the merger”.
Telefónica agreed to sell its O2 operation in the UK to Three in March 2015, but opposition to mergers between mobile operators has increased ever since. The European Commission blocked a deal between Telenor and TeliaSonera to combine their operations in Denmark in September 2015.
“Readers in Britain must have been bemused by the blizzard of commentary and speculation earlier this week around telecoms competition in the UK,” said Fok in a statement. “We might be forgiven for wondering why Sharon White, the new CEO of Britain’s telecom regulator Ofcom, felt the pressing need to go public with her conclusions about the effects of CK Hutchison’s proposed acquisition of O2 without having asked for or heard our views in response to her concerns.”
Fok commented that “the combination of Three (the smallest operator in the market) with O2 makes us able to stand up to the new Leviathan BT (in the blunt words of Dido Harding, chief executive of TalkTalk, earlier this week), not to mention to the old top-of-the-heap predator Vodafone and is the only way we can guarantee that five years from now customers will still be getting more and paying less for mobile services.”
He said that a combined O2 and Three will invest £5 billion in their network over the next five years, and added that a merged company will increase its mobile wholesale operations by “offering for sale fractional shared ownership interests in our network capacity”. He added: “This is unprecedented in the UK telecom wholesale market.”
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