Purchase will see operator become the second biggest in Ireland behind Vodafone, with two million customers and market share of 37.5 per cent
Three has entered into an agreement with Telefonica to buy its O2 business in Ireland for €780m million (£665.1 million).
A further additional payment of €70 million is payable dependent upon achievement of agreed financial targets.
The acquisition of O2 will make Three the country’s second biggest mobile operator, quadrupling its customer base to two million subscribers and increasing its market share to 37.5 per cent.
According to market figures for Q1 from telecoms regulator ComReg, Vodafone was Ireland’s biggest mobile operator, with around 2.2 million customers and a market share of 39.4 per cent.
Last year, Three and O2 had combined revenues of €803 million, which compared to Three’s revenue of €174 million in 2012 on a standalone basis.
Three said the deal with the scale and financial strength necessary to compete even more aggressively in the market to the benefit of consumers.
It added it is now well positioned to become the number one player in the market by providing the best service and value to its customers, with the combined business planning to invest strongly in a creating a state of the art network including 4G over the next number of years.
Three Ireland CEO Robert Finnegan (pictured) said: “Three is very pleased to have agreed to acquire O2 Ireland, a business whose strengths complement ours very well. Since market entry in 2005, Three Ireland has grown organically through innovation, competitive pricing and quality customer offerings. As an ambitious competitor in the market we have been looking at ways to increase customer numbers and grow market share, and acquisition was the natural next step.
“Our combined 37.5 per cent market share gives us the scale and financial strength to compete even more aggressively in the market to the benefit of consumers. Our ability to invest coupled with the combined subscriber base will create new competitive dynamics in the Irish telecoms market.
“Increasing access to high-quality high-speed networks for Irish businesses and consumers is an essential part of our national economic recovery. This deal will allow significant investment to be made in building a state of the art network. The combined network will also deliver very real benefits to customers outside the major urban areas as the increased scale will allow Three to extend its rural network investment programme beyond 2014.”
Telefonica said last month following the publication of its Q1 2013 results that it would like to cut its debt to less than €47 billion before the end of the year from around €51.2 billion. So far this year it has disposed of 40 per cent of its Central American assets.