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Sky and TalkTalk added to list of potential O2 buyers

Barry Collins
21 Jan 2015
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Bidding war begins for the UK's second biggest mobile network

Sky and TalkTalk are the latest companies to be linked with a bid for mobile network O2. Three was thought to be the frontrunner to take over O2, which effectively put up the For Sale signs before Christmas, when it entered takeover negotiations with BT. 

However, reports in the Spanish media - O2 is owned by Spanish telecoms giant Telefonica - suggest Sky and TalkTalk are also interested in the mobile network. Both companies may decide they need a mobile offering to compete with BT, which looks certain to complete a takeover of EE in the coming weeks. 

Sky has previously expressed doubts about entering the mobile market, but given that both BT and Virgin Media will be in a position to offer customers bundled broadband, television, landline and mobile packages, Sky may feel it has little option but to join them. 

TalkTalk already has a mobile proposition, but only as a virtual network that piggybacks on Vodafone's network. The company may decide the time has come to control its own mobile infrastructure, potentially using O2's 4G network to supplement its fixed-line broadband services.

Virgin Media may also be a dark horse in what now seems likely to become a bidding war. Its virtual mobile network runs off EE's network, but given that's now likely to fall into the hands of BT, Virgin may conclude that it doesn't want to depend on its chief rival. 

O2 was thought to be up for sale for around £9 billion, but with increased interest from several potential bidders, that price now may well be pushed beyond the £10 billion mark. BT is paying around £12 billion for EE, which has more customers and a more developed 4G network than O2. 

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