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Three and O2 merger: good or bad news for consumers?

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Three and O2 merger: good or bad news for consumers?

2015 was always shaping up to be a year of major change in how mobile networks are run in the UK.

The announcement of BT’s intention to pay £12.5 billion for EE in December came after networks and broadband providers revealed their plans for so–called ‘quad-play services’, offering TV, web access, landline and mobile as part of an all–in–one deal.

TalkTalk tied up with O2 in November for its new quad play package, with Virgin starting their own deals in May last year.

Rumours persist that Sky and Vodafone are readying a joint service, despite the former’s execs expressing doubts about such an all–round offering.

And into this fast–changing scene comes Three.

contract handshake

News has emerged that its owners, Hong Kong–based Hutchinson Whampoa, are readying a huge £9 billion bid for O2.

A tie–up between the two would make the newly merged network the UK’s largest, dwarfing EE and leaving Vodafone a distant third.

Although an offer hasn’t officially been tabled, O2 is seemingly up for sale. BT looked into the possibility of buying the network it spawned at the start of the last decade before switching attention to EE.

Hutchinson, in turn, already owns O2 Ireland, after paying more than €750 million for it in summer 2013.

So, what would such a deal mean?

Three has traditionally been the outsider in the UK mobile market, taking jabs at the big boys while offering cheaper deals and impressive customer service.

Three mobile phone coverage

Its much improved network and no–extra–cost 4G has made it increasingly popular too. This deal would take it from underdog to top dog.

The question is, will it still be willing to offer such cheap contracts and deals if it becomes the UK’s number one?

It would hardly be wise to jack up prices, but a lack of competition due to its merger could mean it can get away with cutting back on those tempting packages.

On the other hand, BT is likely to push EE cheaper as it looks to corner the mobile market in the same way it’s already doing with its TV services.

Throw in quad–play services, which look set to become ever more popular, especially with families, and the landscape of UK mobile is changing fast and potentially becoming more affordable.

phone masts

There are areas of concern.

Despite legal commitments made at the end of 2014, the mobile networks may well be more concerned with fighting each other than improving the UK’s still average rural connections.

Any agreement between Three and O2 needs to make this a priority.

A final deal remains a long way off.

But you can be sure that the mobile networks of the UK will look an awful lot different at the end of 2015 compared to the start.

Category: News

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