3 hint at exit from Ireland if o2 takeover not approved

kn

This is not the first indication that the European Commission are minded not to approve the 3/o2 takeover. They are citing what happened in Austria after they went from 4 to 3 networks when 3 tookover Orange Austria. The Commission are also citing the possible impact on virtual networks (Tesco Mobile, 48 etc). 

3 are retaliating in suggesting that they may exit the Irish market (by selling of course not upping sticks). Bit of an empty threat considering the money they've spent on licences and accumulated losses to date and the fact that there will likely be no shortage of bidders if they did sell up.

o2 are the real losers here. They are losing market share hand over fist and they have halted all 4g work in anticipation of the 3 buyout that now looks as if its less likely than not to get approval.

http://www.independent.ie/business/irish/decision-time-for-eu-on-3-irelands-780m-bid-for-o2-30033113.html

JTMan

Great news that the EC may not approve the acquisition of Telefonica Ireland by Hutch. It would screw competition and cause prices to start rising. Good to see that the EC has consumer interests at heart. 

The treat to leave Ireland is an empty threat. Hutch are now profitable here, growing and have spent a small fortune on 4G roll out. 

Hopefully, the EC say no to Hutch sooner rather than later as Telefonica Ireland is starting to get dilapidated while in limbo land.  

jahalpin

What would Telephonica do if the bid is rejected?

They are trying to dispose of a non-core asset with the sale of O2 Ireland. If the sale to 3 doesn't go through they will probably close the Irish company and sell the network infrastructure piecemeal to other operators, this would be even worse for competition than the sale of the company as a going concern to an existing operator

It is unlikely that the EU will actually reject the takeover as they allowed the T-Mobile and Orange merger in the UK. There are currently only 4 networks in a country the size of the UK so three networks would probably be enough for a small country such as Ireland

jahalpin

Which mobile operators are likely to make a bid for 3 Ireland if they are put up for sale?

Kristopherus

jahalpin wrote: »

Which mobile operators are likely to make a bid for 3 Ireland if they are put up for sale?

T-mobile would likely be the only one allowed. Voda is out. Telefonica are out Eircom/Meteor/Emobile are skint. Orange are skint. Few enough possible candidate around imo.

StaticNoise

UPC might get interested.

Thor

StaticNoise wrote: »

UPC might get interested.

I was just about to say the same thing. UPC are aiming to become their own mobile provider and I believe they are doing an MVNO deal with Three on their network. While I highly doubt Three would even consider selling after their investment in the country. Them purchasing O2 was a opportunistic deal when it became available and obviously they couldn't have planned for it, It's also likely they put an offer in too stop Vodafone from getting it assuming they would even try. It's general business tactics.

I see no reason why the EC would even consider blocking the deal from going forward. Three aren't becoming a monopoly by purchasing O2 since we still have Vodafone and Meteor along with their respective MVNO's. Three owning O2 just makes Three bigger, but not the biggest. It would be nice for a separate entity to have gotten O2 to create more competition, but alas that doesn't look likely.

Walkman

Very misleading title. There is nothing in that article from Three or Hutchison suggesting they might leave Ireland. Only the opinion of a journalist.

Thor

Walkman wrote: »

Very misleading title. There is nothing in that article from Three or Hutchison suggesting they might leave Ireland. Only the opinion of a journalist.

Welcome to the world of news!! I didn't even read the article, just the comments.

kn

Walkman wrote: »

Very misleading title. There is nothing in that article from Three or Hutchison suggesting they might leave Ireland. Only the opinion of a journalist.

"For its part, Hutchison Whampoa is expected to argue that it cannot justify further investment in its loss-making Irish network if the deal fails to go through."

"If the takeover does not proceed, it raises the prospect of 3-owner Hutchinson Whampoa seeking to exit the Irish market."

Walkman

kn wrote: »

"For its part, Hutchison Whampoa is expected to argue that it cannot justify further investment in its loss-making Irish network if the deal fails to go through."

"If the takeover does not proceed, it raises the prospect of 3-owner Hutchinson Whampoa seeking to exit the Irish market."

You've just quoted the article, that didn't change the fact it's just the journalist talking not anyone from Hutchison or Three

kn

Walkman wrote: »

kn wrote: »

"For its part, Hutchison Whampoa is expected to argue that it cannot justify further investment in its loss-making Irish network if the deal fails to go through."

"If the takeover does not proceed, it raises the prospect of 3-owner Hutchinson Whampoa seeking to exit the Irish market."

You've just quoted the article, that didn't change the fact it's just the journalist talking not anyone from Hutchison or Three

The first sentence is presumably based on some info the journalist got from some source and he is then making a logical deduction from that information. Unless he is making up the first sentence then the second one is a valid outcome to consider as a possibility.

Walkman

kn wrote: »

The first sentence is presumably based on some info the journalist got from some source and he is then making a logical deduction from that information. Unless he is making up the first sentence then the second one is a valid outcome to consider as a possibility.

Nothing new said there. Its here say nothing more. No evidence to suggest Three are going to exit the Irish market that I can see from your linked article.

kn

Walkman wrote: »

kn wrote: »

The first sentence is presumably based on some info the journalist got from some source and he is then making a logical deduction from that information. Unless he is making up the first sentence then the second one is a valid outcome to consider as a possibility.

Nothing new said there. Its here say nothing more. No evidence to suggest Three are going to exit the Irish market that I can see from your linked article.

"Hutchison Whampoa has hinted that it will pull out of Ireland if its fails – a move that could see the departure of one of the biggest infrastructure investors in the world."




http://www.independent.ie/business/irish/hutchison-three-offers-concessions-to-eu-on-its-bid-for-o2-30045081.html

angeline

I'd open a bottle of champagne if that happened!!

Thor

angeline wrote: »

I'd open a bottle of champagne if that happened!!

I would love for you to elaborate more on that. What possible reason could there be to celebrate if a giant multi-national conglomerate pulls out of Ireland.

Three will never pull out of Ireland for two reasons.

1. The deal will most definitely go through. The EU have no real reason to disapprove of it and are only holding out over reservations with how there will be less competition when moving from 4 direct networks to just 3, but keep in mind that before Three launched in Ireland, there was only three networks available and no MVNO's. The EU have already approved similar deals in the past and Three seem eager to get O2, even if it means selling radio spectrum and guarantee the current MVNO agreement O"2 has with Eircom.

2. They would loose more money, and selling means they have zero chance of getting it back. Their investments in 4G tech alone would be a massive loss. Also, said it before. O2 being for sale was one of opportunity for Three and they sought to take advantage of it. No doubt their plans before this would still be in place and currently there deals are far better than the competitions.

Looking forward to the EU ruling, but considering they have yet to say no, they can only be leaning towards yes, because if O2 don't sell to Three, it will be more than likely stripped bare, and ultimately that would be much worse for Ireland than simply another network absorbing it. Three would become the second biggest network and both Vodafone and Eircom/Meteor will have even more reason to get customers away from Three, which should be good for consumers.

I wonder why UPC didn't just try to buy O2 in the first place. They would have instantly gotten their own network and a mobile customer base.

angeline

Agree fully with your last paragraph.

D'Peoples Voice

Thor wrote: »

I wonder why UPC didn't just try to buy O2 in the first place. They would have instantly gotten their own network and a mobile customer base.

I presume they are still rolling their own tripleplay cable network, they also need to update their MMDS TV network, adding a 2/3G network that still requires the full rollout of a 4G network, well it might be a bit more than Liberty Global (UPC) can handle right now. I would have thought their only interest in mobile is to allow them compete with Eircom's quadplay services - TV/broadband/mobile/landline phone.

kn

I cannot see 3 pulling out either unless they wanted to send the EU commission a message that might soften their cough with a view to future takeover's in much bigger markets.

Ultimately I think giving MVNO's free access to their network at a regulated wholesale pricing structure will deal with all competition issues.

Boards.ie: Niamh

Moved from Three talk to forum. Mobile forum charter now applies, please read this before posting.

o2retailman

Boards.ie: Niamh wrote: »

Moved from Three talk to forum. Mobile forum charter now applies, please read this before posting.

It wouldnt surprise me at all really if 3 exited the irish market.they have made €0 net profit since there set up in ireland...and one of main reasons they are so interested in our network is to have a good customer service base as right now 3 customer service is shocking..i was with 3 for 18 months...its very bad

Kristopherus

o2retailman wrote: »

It wouldnt surprise me at all really if 3 exited the irish market.they have made €0 net profit since there set up in ireland...and one of main reasons they are so interested in our network is to have a good customer service base as right now 3 customer service is shocking..i was with 3 for 18 months...its very bad

Its only bad if you have problems. Most people dont.:pac:

jimmycrackcorm

o2retailman wrote: »

It wouldnt surprise me at all really if 3 exited the irish market.they have made €0 net profit since there set up in ireland...and one of main reasons they are so interested in our network is to have a good customer service base as right now 3 customer service is shocking..i was with 3 for 18 months...its very bad

Says the O2 Retail sales man. lol

o2retailman

jimmycrackcorm wrote: »

Says the O2 Retail sales man. lol

Okay...i prob had that comin to me ha ha..

o2retailman

Kristopherus wrote: »

Its only bad if you have problems. Most people dont.:pac:

If people didnt have any problems we wouldnt need customer care at all...its there for when you do...lol

Turn the radio on

Didn't they get plenty of tax payers money to provide broadband in rural areas ?

SpaceTime

jahalpin wrote: »

What would Telephonica do if the bid is rejected?

They are trying to dispose of a non-core asset with the sale of O2 Ireland. If the sale to 3 doesn't go through they will probably close the Irish company and sell the network infrastructure piecemeal to other operators, this would be even worse for competition than the sale of the company as a going concern to an existing operator

It is unlikely that the EU will actually reject the takeover as they allowed the T-Mobile and Orange merger in the UK. There are currently only 4 networks in a country the size of the UK so three networks would probably be enough for a small country such as Ireland

That is HIGHLY unlikely, O2 Ireland is profitable and the second largest player in the Irish market and it would have other buyers lining up.

The most likely scenario is that they'll bundle a sale of O2 Ireland with O2 UK.

Various players are sniffing around, including AT&T and Verizon apparently, both of whom are apparently considering putting a toe into the EU market.

Within Europe there are plenty of companies who might come forward for at least O2 IRL.

Telefonica has a crazy level of debt and needs to dispose of valuable assets to get back to sustainability. It's not disposing of O2 Ireland because it's some kind of peripheral under performing asset it wants to get rid of. It needed the cash and has been disposing of various bits of O2.

What's most valuable about O2 IRL is the customer base and the GSM, UMTS and 4G licenses it owns.

The most likely thing it will do is ensure that Telefonica doesn't accept bids from players already in the Irish market to avoid another mess like this.

The other solution would be for 3 to buy O2 Ireland and sell 3 Ireland to someone else.

As for UPC entering the market by buying O2 IRL. I think they've a tendency to operate as a standard model i.e. if UPC doesn't do that in the Netherlands, they won't do it here. So far, they've only ever operated MVNOs.
Owning a mobile network outright with infrastructure would be a totally new departure for Liberty Global (UPC).
From a marketing point of view though it would make perfect sense.

...

I would suspect either the deal will go through with Three ditching spectrum and a new 4th operator emerging or, else Three will pull out of the deal and someone else will come in. O2 IRL is quite an attractive purchase for the right buyer and the Irish economy's now growing again and has good prospects to sentiment will have improved a lot.

There's one other possibility too, if Telefonica's successful in re-financning about €5bn of debt, it needs to extend its loans basically, it may not need to sell O2 IRL at all. So, the status quo might just remain.

My money's on O2 UK being sold off though together with O2 IRL.
Three was the main contender there too that, but I can't see that happening either without severe regulatory issues particularly since the other networks merged into EE a while back.

Bear in mind they've already been selling assets in the UK. O2 fixed broadband/phone service was sold to BSkyB for example for £200m last year.

My prediction:

Three UK and Three IRL will be repackaged and sold to someone else (they're actually almost the same network anyway and share infrastructure... Quite hard to split them out actually). Examples : AT&T Wireless, Telia-Sonera, various asian operators with deep pockets all spring to mind.

Hutchison Wampoa will buy O2 UK and IRL and become a major player, possibly retaining the O2 brand.

Walkman

Turn the radio on wrote: »

Didn't they get plenty of tax payers money to provide broadband in rural areas ?

Not quite. They got €80 million but also coughed up €140 million themselves