This weekend, the UK mobile industry is abuzz with talk of what a potential take over of O2 by Three’s parent company Hutchison Whampoa Ltd could mean for an industry that has seen a lot of changes in a few short years. With networks rising and falling, retailers becoming huge success stories and sudden wipeouts and the so called quad-play market tipped to be the next big selling point, this latest saga was always going to attract attention, both good and bad.
The first concern is how a potential merger will affect competition. Going from five major networks a few years ago to potentially just three next year has got critics worried that this could cause prices to rise, with knock on effects for the MVNOs. However some have pointed toward Three’s apparent customer championing propositions, and a range of network and customer based awards. Some have said that three majors could, in fact, drive competition even more, with Telefonica not considered the best of owners for the O2 brand.
The key to this would be how HWL will deal with the two businesses should the purchase be completed. A merger brings in to question how the branding will be handled. Both O2 and Three are strong brands in the marketplace, and both have fiercely loyal customers. HWL are likely to keep their self made Three brand, as occurred in Ireland. After their purchase of Vodafone in Australia however, the Three brand was absorbed into the larger company, so this is certainly not a guarantee.
The buzz phrase ‘quad-play’ is starting to become a big thing in the UK too, with Vodafone announcing they mean to supply customers with TV services and BT’s move to acquire EE, joining a home service provider with a mobile network, Three and O2 need to keep their eye on this proposition whether they unite or not. Currently neither business has announced any plans to join the quad-play melee.
The Communications Workers Union has also raised concerns about how many people could stand to lose their jobs. Andy Kerr, the deputy general secretary of the CWU has announced he will hold a meeting with Ronan Dunn, O2’s CEO. He pointed out that O2 had been through “a great deal of operational change in the last two years” and that he hoped that any possible purchase of O2 would “protect UK jobs and maintain service and standards for customers.” The CWU currently represents over 3,400 O2 call centre and support staff and engineers.
Whatever the outcome of the purchase, the UK is going to see another great shakeup of its turbulent mobile industry, but no time soon, with a successful purchase by HWL not being completed until at least Q2 of 2016. In the meantime, all we can do is watch and see how the process pans out.
Last Updated on November 27, 2018.