Will Three’s Purchase of O2 Affect You?

Will Three’s Purchase of O2 Affect You?

Once upon a time (circa 2003), Three was the plucky upstart in Britain's mobile networks race. They came with a weird name, some weird phones (remember the NEC E313?) And peddled something called 3G connectivity. For years they were mired by poor reception and bad phone choices, but the company (funded by the extremely wealthy Hutchison Whampoa) continued on, despite providing unpopular in the market.

As the years rolled by, Three began to remedy those issues, assisted by a new wave of smartphones which included 3G support as standard and through the purchase of a large amount of wireless spectrum, Three began to gain ground. It also helped that they aggressively undercut the competition in terms of pricing, offering the latest smartphones on extremely generous contracts for quite reasonable monthly sums.

O2, on the other hand, can trace their roots back to the very earliest telephone communications – through their original parent company BT. They won the initial license to create a mobile telecommunications network in the UK and grow into one of the largest networks in the country, now under the ownership of the Spanish mobile giant Telefonica. In years gone by, they were the exclusive partner with Apple on the iPhone, but these days they're known for their great customer service, premium product offerings and sponsorship of venues.

What do these companies have in common? Well, they're the two of the biggest networks in the UK, and the former is trying to purchase the latter. Yes, Three are now flush with cash and Whampoa are trying to complete the merger of their two companies for a reported £ 10.25 billion. It would create the largest mobile network in the UK, large enough to rival EE, which was formed from the merger of T-Mobile and Orange. Their merger faces a hard battle against regulatory bodies who are concerned that the loss of a competitor in the market would lead to bad results for customers.

If the deal does go through, what would it mean for you?

Well, it might mean a number of things. On the plus side, it would mean that the O2 and Three networks would have brought together to share their coverage. This would give the newly unified company a huge amount of 2G, 3G and 4G coverage. Almost immediately, customers would have given access to this newly expanded network, which means faster internet in more places, which can only be a good thing. It may also mean the expansion of benefits from each company, like free data roaming on Three and O2 Priority Rewards which offer special deals to customers on their network.

On the other hand though, as the regulatory bodies fear, it could mean less competition in the market. That could mean higher prices and worse customer service, as there are fewer businesses around to force prices down. Recent Ofcom regulations said that mobile networks can not change the pricing of their contracts after you've taken it out, but it could mean that by the time you're ready to shop for a new one, you could be left paying more than before.

In the short term though, it's worth remembering that this deal has to come up against some thoughtful hurdles in order to complete. All we can do is wait and see what the future has in store for us.

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