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UPDATE- Telefonica sells O2 for £10bn; BT back in mobile market

BT announced plans to step back into the mobile market today as Hong Kong conglomerate Hutchison Whampoa agreed to buy O2 for £10.2bn.
UPDATE- Telefonica sells O2 for £10bn; BT back in mobile market

After two months of talks, Hong Kong conglomerate Hutchison Whampoa is to buy O2, the UK’s second-largest mobile network.

Hutchison, owned by Chinese billionaire Li Ka-shing, has offered US$15bln, or about £10.2bn, in cash for Telefónica-controlled O2.

News of the deal arrived as BT Group, which recently agreed to buy EE for £12.5bn, announced plans today to step back into the mobile market.

BT was one of the pioneers of the UK's mobile phone sector with its Cellnet service (later rebranded as O2) in the 1980s, but it spun off the business to Telefonica.

Today, BT said it would use EE's network to offer its new 4G mobile service, as part of a plan which it had been working on prior to the acquisition deal.

Its cheapest offer is aggressively priced at a discounted rate of £5 a month for existing BT broadband customers.

BT is offering customers who sign up to its BT Mobile contracts the ability to watch Premier League football matches that it owns the rights to via an app, even if they are not broadband customers.

The consolidation in the market has sparked a rush to offer bundles deals of TV and telecoms.

Vodafone will push aggressively into TV and broadband for the first time this year, while Sky has signed a deal to launch mobile services next year.

Hutchison already owns Three, the country’s smallest operator, so the planned merger is expected to be heavily scrutinised by competition watchdogs.

Late last night, the Hong Kong group said the deal would be subject to regulatory approvals that might take up to a year.

The combination would create a mobile carrier with about 31mln customers - 41% share of the UK wireless market - a much stronger challenger to BT's EE.

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