Three negotiating to buy O2 for £10bn

Its official! The parent company of the Three network, Hutchison Whampoa Limited has entered exclusive negotiations to buy the O2 network from Telefonica for a cool £10bn.

So the rumours are true – and the combined companies would create the UK’s biggest mobile network – assuming the competition regulators give it the green light.

According to the press release, the deal would see Telefonica paid £9.25bn up front – with a further billion once the combined company reaches a certain earnings threshold.

The upshot for customers is that it could go one of two ways: We’ve recently seen further consolidation in telecoms with BT buying EE – a move which could mean lower prices as the bigger companies can achieve economies of scale (by sacking duplicate staff), but it could also lead to higher prices as the big four becomes the big three, so have less competitors (so less reason to cut prices).

We’re also wondering if the deal does get completed… what will they now call the Millennium Dome?!