In the world of mobile telephony, characterized by brutal competition and massive capital expenditure, 02 is small fry.
While Vodafone, T-Mobile and Telefonica Moviles have broken free of their European base to operate in other continents, O2 operates in just the UK, Germany and Ireland.
The fact that it can confidently predict further strong revenue and profit growth in the current financial year simply indicates that it can extract a higher price than any prospective bidder has offer in the past.
The most likely partner is Dutch incumbent KPN NV which has a held unsuccessful merger talks with 02 in the past. The logic of a combination is that both on minor players in the German market and together they could make an impact.
Other possible partners are Telefonica Moviles and Telecom Italia Mobile, who both lack a presence in the UK and Hutchison Whampoa, which needs to boost the customer base of its 3 operations.
Given that O2 reveals that contract churn was 31% last year and pre-pay churn was up to 37%, any buyer is not buying a loyal customer base. It is just a well-run company without the scale to survive on its own for long.
