O2, the mobile operator, is being taken over by Spanish telecoms giant Telefonica for £17.7bn.
Telefonica, which is aiming to spread its operating presence across Europe, has had O2 as a takeover target for some time, With the takeover, Telefonica will acquire mobile networks in Germany, Ireland and other regions, in addition to the main one in the UK.
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O2 was previously known as BT Cellnet, before it was spun off from the BT group before the telecoms crash. BT is now slowly building up a new mobile phone business with a new network.
O2 has been hit by some billing problems in recent months and is rolling out a new multi-million pound customer relationship management system with the help of IBM Global Services.
Telefonica said the O2 brand would be retained and its headquarters will remain in the UK. It is not yet known whether there will be any cuts in O2 call centres or IT departments arising from any operational crossover between the companies.
Call centre workers at O2 recently threatened industrial action over proposed new pay scales and pension arrangements, which they claimed fell below what was offered when the company was owned by BT.
O2 chairman Sir David Arculus and chief executive Peter Erskine will join the Telefonica board.