Operator pulls plug on £7 billion deal citing proposed merger with Three
O2 has withdrawn from the £7 billion tender to provide a dedicated voice and data network for the emergency services leaving EE as the last man standing in the process.
O2’s withdrawal was first reported by the Financial Times with the operator confirming the news, citing its proposed merger with Three, in a statement sent to Mobile News. EE was the only other bidder.
Chief executive officer Ronan Dunne had told this publication last year that it would be tendering for the new dedicated voice and data system for its ten year term from next year. He said it would be worth £600-£700 million per year. The current system of communications was managed by Airwave in a deal due to expire next year.
At the time, EE joined the race for the contract which was to modernise communications infrastructure for the emergency services. Around 300,000 people use the network which has 99 per cent land coverage.
The Home Office said it was disappointed at O2’s decision.
New data services which could be implemented (and being trialled), include officers being “armed” with shoulder cameras that feed back live footage to the police computer, which will use intelligence to automatically identify missing persons, suspects or known trouble makers.
A spokesperson for O2 said: “The potential restructuring of the UK telecoms market as a result of current M&A activity affecting several players in the industry raises questions about spectrum (both current holdings and timings of access to future spectrum), network sharing arrangements and specifically in our position the proposed potential acquisition of O2 in the UK by Hutchison Whampoa. We are therefore unable at this time to provide the detail and commitments required to continue into the next stage of the bidding process put forward by Government.”