Saturday 20 January 2018

Three boss calms mobile bill fears as firm buys O2

John Mulligan

John Mulligan

The boss of mobile phone firm Three has insisted that consumers shouldn't fear higher prices after it announced plans to buy O2 Ireland for up to €850m.

Three Ireland chief executive Robert Finnegan said that the enlarged group – which will become the country's second-biggest mobile operator after Vodafone – will continue to push prices down for subscribers even as it seeks to generate a return on its investment.

The O2 name will be phased out.

But not everything went smoothly for Three yesterday. Just two hours after it confirmed its acquisition of O2 here, its network failed, leaving hundreds of thousands out of phone contact.

The four-hour glitch was caused when Virgin Media – which provides some services to Three – botched a software upgrade.

Since the downturn, mobile operators have cut their margins as they try to hang on to hard-pressed customers, resulting in a drop in profitability.

Mr Finnegan claimed the size of Ireland's population was simply too small to sustain four big operators. The combined Three-O2 business will have just over two million subscribers, with 1.56 million of those coming from O2. Vodafone has 2.2 million, but Mr Finnegan said he intends to make Three the largest player in the country within a few years.

Telefonica-owned O2 is the second-biggest player in the market behind Vodafone and the acquisition will take Three's market share to 37.5pc.

REDUCTIONS

The company started out as Esat Digifone, which was bought by BT in 2000. It became O2 when it was acquired by Telefonica six years later.

Ireland's telecoms watchdog – ComReg – said that between the first quarter of 2011 and the first quarter of 2013, average monthly telephone bills for prepaid mobile subscribers here fell 16pc to €17.76. For contract customers, average bills fell 19pc to €41.57.

But those reductions are a combination of users cutting back and mobile operators offering more attractive deals.

Irish Independent

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