Hutchison Whampoa, the Hong Kong-based conglomerate behind mobile network operator Three, will attempt to buy either O2 or EE before Christmas 2014, reports have said.
According to Reuters, which first reported the news, sources close to the talks – who declined to be named – said Hutchison Whampoa was in the process of preparing its own bid alongside an advisory boutique.
It is thought EE would be the best option for Hutchison Whampoa from a technological standpoint. The two companies already co-operate in the UK through a network-sharing agreement.
But the sources claimed it would be much easier for Hutchison Whampoa to fund the purchase of O2, although current owners Telefónica may be resistant to such a deal and, according to Reuters’ sources, would probably prefer to sell to BT in a quicker, simpler deal.
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O2 chief executive Ronan Dunne recently told journalists – before BT went public with its own plans – that a merger between O2 and Three was the least likely outcome in the scenario.
Both deals, if they go ahead, will attract the attention of the UK competition authorities, but any sale of the larger EE network would be more problematic from this standpoint.
The sudden surge of interest in UK mobile networks comes as the consumer market transitions towards quad-play bundling, whereby users procure TV, mobile, landline telephone and broadband services from one provider.