Debt laden Telefonica has agreed to sell its O2 Ireland operation to 3 Ireland. The deal is worth at €850m according to ZDNet. If the deal goes ahead, it is subject to regulatory approval, 3 Ireland will possess 37.5 per cent of the Irish market.
The deal would quadruple 3 Ireland’s market share, reports Reuters. 3 Ireland has been pushing to grow through acquisitions and failed to seal a similar deal to buy another of Ireland’s mobile operators Meteor. 3 has been building a presence in Europe but its profits are low as it lacks the scale of competitors in most markets. A combined 3 and O2 Ireland network would still be smaller than Vodafone in Ireland, it controls 39.4 per cent of the market.
Discussing the new deal Robert Finnegan, chief executive of 3 Ireland, said “This gives us the scale and financial strength to drive competition. We will continue to be aggressive in the market going forward and we would like to be number one in due course”. Incidentally 3 Ireland is due to launch its LTE network in Dublin in August offering speeds as fast as 100Mbps.
Telefonica has debts of €52 billion so is selling assets in many countries in Europe and South America to try and get back on an even keel. Further assets expected to be sold by Telefonica include real estate and a stake in China Unicom.
The European antitrust watchdog will have to rubberstamp the Irish deal. Reuters notes that the EU has in the past been concerned about market competitiveness in countries where mobile operators are reduced to only three players.
