O2 chief reassures on Telefónica aims
We’ll send you a myFT Daily Digest email rounding up the latest France news every morning.
Peter Erskine, chief executive of O2, the UK mobile phone company, insisted on Monday that Telefónica would not repeat the mistakes made by France Telecom when it acquired Orange, if the Spanish telecoms group’s £17.7bn ($30.8bn) bid for his company goes through.
“The encouraging thing is that strong on the lips of Telefónica and us was that we were keen to learn from what France Telecom and Orange had and hadn’t done,” Mr Erskine said, as he sought to play down concerns about cultural differences.
Orange, the strongest UK brand among the mobile operators for most of the 1990s, lost its way following its takeover by France Telecom five years ago. Excessive interference from Paris was largely to blame for a demise that Orange is only now beginning to correct.
O2 is now in a similar situation, having built up its brand over the past two years to put it second only to Vodafone in the UK market overall.
“I think they [Telefónica] are very minded not to bring in a big bureaucracy that disrupts the machine,” Mr Erskine added.
Both Mr Erskine and David Arculus, chairman, will each take a seat on Telefónica’s main board as part of the deal, and Mr Erskine will continue to run all three O2 businesses in the UK, Germany and Ireland.
Mr Erskine said there had been no further approaches since the Telefónica bid at 200p per share. Deutsche Telekom, the most likely counter-bidder, has already ruled itself out. O2 shares remained unchanged yesterday at 195½p.
But he would not be drawn on whether he would get a mandate to expand O2 into other developed markets. Telefónica has insisted that O2 and its Moviles’ mobile arm, which has operations in Spain and Latin America, will remain separate operating units with O2 focusing on the developed markets.
The comments came as O2 reported another strong set of results. The company, the UK’s second largest mobile operator, reported interim profits of £357m, up from £339m a year earlier, on revenues up 12 per cent at £3.62bn. The gains were driven by continued rapid growth in Germany where O2 is the number three operator, where revenue grew to £1.08bn from £877m and earnings before interest, tax, depreciation and amortisation jumped 51 per cent to £246m.
Get alerts on France when a new story is published