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| O2 and Virgin Media in talks to merge | O2 and Virgin Media in talks to merge |
| (about 8 hours later) | |
| Mobile operator O2 may be set to merge with broadband giant Virgin Media to create one of the country's largest entertainment and telecoms firms. | Mobile operator O2 may be set to merge with broadband giant Virgin Media to create one of the country's largest entertainment and telecoms firms. |
| A tie-up between two big players in Britain's telecoms and media sector would create a major rival to BT. | A tie-up between two big players in Britain's telecoms and media sector would create a major rival to BT. |
| Spanish firm Telefonica, which owns O2, confirmed that it was in talks with Virgin-owner Liberty Global. | Spanish firm Telefonica, which owns O2, confirmed that it was in talks with Virgin-owner Liberty Global. |
| The company stressed that the negotiations were ongoing and there was no guarantee they would reach a deal. | The company stressed that the negotiations were ongoing and there was no guarantee they would reach a deal. |
| "The process initiated by both parties is in a negotiation phase, not being able to guarantee, to this date, neither the precise terms nor the probability of its success," Telefonica said. | "The process initiated by both parties is in a negotiation phase, not being able to guarantee, to this date, neither the precise terms nor the probability of its success," Telefonica said. |
| Virgin Media declined to comment. | Virgin Media declined to comment. |
| O2, which provides the network for Tesco Mobile, Giffgaff and Sky Mobile, is the UK's largest phone company with around 34 million users. | O2, which provides the network for Tesco Mobile, Giffgaff and Sky Mobile, is the UK's largest phone company with around 34 million users. |
| Virgin has about six million broadband and cable TV customers and another three million mobile users. | Virgin has about six million broadband and cable TV customers and another three million mobile users. |
| A tie-up between the two would increase pressure on BT, which owns the UK's second-largest mobile network EE. | A tie-up between the two would increase pressure on BT, which owns the UK's second-largest mobile network EE. |
| BT has 28 million mobile, TV and broadband customers across the country. It also provides services to a million businesses. | BT has 28 million mobile, TV and broadband customers across the country. It also provides services to a million businesses. |
| Telefonica tried to sell O2 to the owner of Three, CK Hutchison, for £10.3bn in 2015. However, that deal was blocked by the European Commission over concerns that it would have left just three major mobile phone operators in the UK. | Telefonica tried to sell O2 to the owner of Three, CK Hutchison, for £10.3bn in 2015. However, that deal was blocked by the European Commission over concerns that it would have left just three major mobile phone operators in the UK. |
| But telecoms analyst Paolo Pescatore, who works for PP Foresight, does not think a deal between O2 and Virgin would face similar hurdles. | But telecoms analyst Paolo Pescatore, who works for PP Foresight, does not think a deal between O2 and Virgin would face similar hurdles. |
| He said Virgin Media mainly provided services through cable, such as broadband and TV, whereas O2 focuses on mobile. | He said Virgin Media mainly provided services through cable, such as broadband and TV, whereas O2 focuses on mobile. |
| "It's very much complementary," he said. | "It's very much complementary," he said. |
| Describing what a tie-up between the two companies could look like, Mr Pescatore said: "If you're an O2 customer, you'll be able to buy more than just mobile. | |
| "If you're a Virgin Media customer, the vision - ultimately - will be that you can buy everything in one place with one bill, which isn't the case today." | "If you're a Virgin Media customer, the vision - ultimately - will be that you can buy everything in one place with one bill, which isn't the case today." |
| But fellow telecoms analyst Kester Mann, who works at CCS Insight, said customers may need a "new mind-set" if packages for mobile, TV and broadband are to gain popularity. | But fellow telecoms analyst Kester Mann, who works at CCS Insight, said customers may need a "new mind-set" if packages for mobile, TV and broadband are to gain popularity. |
| "The UK has been a very slow market compared to others in Europe to transition towards this idea of packaged and bundled services," he said. "Customers haven't been demanding these types or services." | "The UK has been a very slow market compared to others in Europe to transition towards this idea of packaged and bundled services," he said. "Customers haven't been demanding these types or services." |
| However, companies like them. "If they can lock customers in to fixed line and mobile then obviously it's that much harder to extract yourself from," Mr Mann said. | However, companies like them. "If they can lock customers in to fixed line and mobile then obviously it's that much harder to extract yourself from," Mr Mann said. |