Hutchison Whampoa has acquired indebted Spanish group Telefonica’s O2 Ireland mobile business in a €780m deal and revealed plans to merge the acquired business with its Irish mobile operator, Three.
The deal, subject to regulatory approval, is expected to quadruple Three Ireland’s market share to 37.5 % and follows Hutchison’s failed bid in 2012 for Eircom, which owns Meteor, the country’s third-biggest mobile operator.
The sale will assist Telefonica, which has been hardly hit with the downturn in its domestic market, in its aim to trim down debt by a more €5bn by the late 2013.
Further, the merged business is planning to invest in developing a modern network including 4G/LTE during the following years.
Three Ireland CEO Robert Finnegan said that the combined 37.5% market share offers the scale and financial strength to compete even more aggressively in the market to the benefit of consumers.
"Our ability to invest coupled with the combined subscriber base will create new competitive dynamics in the Irish telecoms market," Finnegan said.
"This deal will allow significant investment to be made in building a state of the art network. The combined network will also deliver very real benefits to customers outside the major urban areas as the increased scale will allow Three to extend its rural network investment programme beyond 2014."
Said to be the biggest Asian investor in European wireless assets, Hutchison had acquired Orange in Austria in January 2013, with plans to merge its Italian unit with Telecom Italia.
According to Informa Telecoms & Media research analyst Francesco Radicati, if regulators approve the purchase, the merged operations would take O2’s place as the second-largest operator in Ireland.
"Blocking Three from acquiring O2 would signal to Hutchison Whampoa that it has no possibility of expanding in Ireland, and likely drive it to abandon the Irish market altogether," Radicati said.
"The most likely stumbling block for the merger, however, will be Three’s network-sharing deal with Vodafone. If the deal goes through, it may make Ireland a more attractive market for Vodafone and Three to compete in."
This article is from the CBROnline archive: some formatting and images may not be present.
Join Our Newsletter
Want more on technology leadership?
Sign up for Tech Monitor's weekly newsletter, Changelog, for the latest insight and analysis delivered straight to your inbox.