O2 agrees sale, but there's no change for mobile customers yet

European phone operator Telefonica had been in talks with Hutchison Whampoa Ltd (HWL) for weeks, but last night it revealed it had reached an agreement to sell its British arm, O2, to the conglomerate for £10.25 billion.

The sale is expected to complete in the first half of 2016 subject to approval by EU competition regulators. In the meantime nothing will change for O2 or Three customers. HWL says it's too early to say whether things will change once the sale has completed.

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Canning Fok, group managing director of HWL, says: "The combination of Three UK and O2 UK will create a business with unmatched scale and strength that will allow us to better compete against other operators in the marketplace and will also enable us to provide even better service and innovation to UK customers in a market that will remain fully competitive."

HWL has agreed to buy mobile provider O2

O2, formerly known as BT Cellnet, was spun off from BT in 2001 before being bought by Telefonica for £17.7 billion in 2005.

HWL already owns the Three network and in acquiring O2 will become the UK's biggest mobile operator – with almost 33 million customers – ahead of EE, itself recently the subject of a takeover.

Last month BT announced it had agreed terms for a £12.5 billion takeover of EE, which it hopes to complete by the end of the summer should regulators give it the all-clear (see the BT to buy EE, but no change for customers yet MSE News story for more).

Additional reporting by the Press Association.