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O2 & Orange Join Race to Buy T-Mobile UK

Gordon Kelly

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O2 & Orange Join Race to Buy T-Mobile UK

So T-Mobile may not want its UK business but it seems plenty of others do...

According to The Times, Orange has expressed an interested in the German giants British arm while The Guardian reports O2 is sniffing around as well. Any deal would be significant with analysts currently valuing the business at £3bn though that's a whole £1bn less than T-Mobile splashed out on its 3G licence in 2000.

T-Mobile is owned by parent company Deutsche Telekom and back in May CFO Timotheus Hoettges admitted: "The British market is highly competitive and has comparably low margins. In our view consolidation is a means to take excess capabilities out of the market. Nothing is unthinkable on our side."

A sale now seems likely - whether its imminent is another matter - and consolidation for the UK market would bring it in line with other European countries which tend to be dominated by fewer networks. With 3 also potentially on the menu (Vodafone bought 3 Australia in February) it could grow even smaller too.

That said, stepping into line with other nations may not be the best idea. Competition breeds competition and there is a reason Hoettges says there the UK is "highly competitive and has comparably low margins". Fingers' crossed after these potential takeovers this isn't something we lose...

Links:

via The Guardian

via The Times

Mark Horton

July 1, 2009, 7:11 pm

Please god! don't let it be Orange!!

WyWyWyWy

July 1, 2009, 9:34 pm

Virgin or Ikea or Tesco should buy it and become a proper network!


Better to increase competition rather than reduce it.

Guest

July 1, 2009, 9:45 pm

Hopefully not O2. It would be nice if three bought it as they are much more innovative company.

farki80

July 1, 2009, 11:12 pm

O2 buying would be the worst. I am rooting for '3', but highly doubt they have the money for it.

Xiphias

July 2, 2009, 1:26 am

Competition also breeds two and three year contracts and phones locked to a single network.

Ben

July 2, 2009, 2:42 am

Three don't have the money. Maybe if their sugar daddy decided to make a serious play for the UK market then something could happen, but I really don't think that's likely - if anything I'd imagine Hutchison are more than ready to sell their UK operation as well. Orange already have their large ISP arm, and O2, well, they've not long been Telefonica. I think Vodafone is still best placed to stump up a serious offer for T-Mobile.

basicasic

July 2, 2009, 4:49 am

How can this be anything but bad news for consumers. The lot of them are bunch of vultures. They should be investing in better coverage and improved service rather than eliminating competition in order to milk the public.

Simon

July 2, 2009, 3:47 pm

@basicasic I couldn't agree more. It may reduce their operational costs, but that doesn't mean the consumer will be any better off.

Ben

July 2, 2009, 7:43 pm

Well, no, of course it's not good for the consumer. But big business's job is to make big profits for big shareholders. When has it ever been about anything other than milking the public? The relatively tough competition in the UK market has unfortunately made some of the players vulnerable to take-over. I suppose the regulator should have been doing more to ensure a level playing field and keep the dream/illusion of competition alive; it'd be a bit late for the regulator to suddenly grow balls and block this now, though.

Camperdown9

July 3, 2009, 8:37 pm

Hi





It was reported in April or May that T-Mobile wanted to sell their UK network or merge it with another operator. So far everyone has been rumored to be buying it.





Vodafone, O2 and Orange all have their fans, and people who hate them. In my view its all down to what you want and what the signal is like where you spend most of your time.





With regards to 3, I have to say that there is little or no chance that they will buy T-Mobile UK. Hutch who own 3UK have recently sold a lot of their Indian network to Vodafone. They are about to merge their 3 Australia network with Vodafone in such a way that Vodafone run the new company. 3 UK also have never made a profit, in fact they could be looking for a buyer.





It would be good if one of the smaller European networks like E-Plus, Meteor, Bouygues or Base bought T-Mobile UK. It would be nice to see something new in the UK.





Alex

TheFlyingGerbil

July 5, 2009, 1:38 am

I notice UK is comparatively low-margin and not low margin. I can't stand how mobile phone companies hide extortionate fees behind mind bendingly complex tariffs - even on pre-pay it is not simple.

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