Telefonica Tto Buy O2 For $31.5 Billion

As we mentioned earlier yesterday, Telefonica has made a bid for UK operator O2…the price: $31.5 billion, in a deal that could spur greater competition in Europe’s more established markets.
The merged company would bring together 25 million O2 customers in Britain, Germany and Ireland with Telefonica’s 145 million customers, most of them in Spain and Latin America, and would create Europe’s second-largest telecom company by market value, behind Vodafone…this should have profound implications for content providers too, and could see cross-country deals.
Telegraph has a good pithy analysis of the deal: “In the world of mobile operators there is a rapid land grab going on. Revenues per subscriber are going down, not up, and groups such as Telefonica are in a flap. What better way to respond but going on an acquisition spree? Telefonica tried all it could yesterday to show how the deal was a forward looking move but the truth is different. As the telecoms industry engages in an array of restructuring and content deals, Telefonica has made its big defensive play by paying large to secure new lines of growth outside its southern European and Latin American heartland.”

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