Hutchison breathes in O2

Hutchinson's planned takeover of O2 is good for investors, but bad for customers.

Britain's second-biggest mobile operator, O2, is to be sold to Hong Kong's Hutchison Whampoa for £10.25bn by its owner, Spain's Telefonica.

Hutchison is to merge it with its other British mobile group, Three, the market's number four. The group would leapfrog EE to become the UK's biggest player with 31 million customers 41% of the wireless market.

What the commentators said

Still, this deal would cut Telefonica's debt, and allow it to exit a "competitive and rapidly changing" market. It's good for shareholders, said economist.com. Mergers offset slowing growth and shrinking margins.

But in other countries, where operators have fallen from four to three, the disappearance of the smaller "maverick" that kept the others on their toes has generally pushed up prices. So this deal could be bad for consumers no wonder European authorities plan to scrutinise it "closely".

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