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Last Updated: Tuesday, 10 January 2006, 17:05 GMT
EU approves Telefonica's O2 bid
Telephone keypad
Telefonica sees 02 as a stepping stone to expanding its business
The European Union (EU) has approved Telefonica's 17.7bn ($31.6bn) takeover of UK mobile phone company O2 after the Spanish firm agreed competition terms.

The approval is conditional. In order for the deal to go through, Telefonica has agreed to withdraw from an international mobile phone alliance.

The watchdog was concerned that the takeover would distort roaming charges.

Telefonica wants to get a foothold in two of Europe's largest mobile phone markets - the UK and Germany.

The two firms are betting that O2's businesses in the UK, Germany and Ireland will dovetail well with Telefonica's operations in Latin America and Spain.

Telefonica has about 145 million customers and about 173,000 staff.

Regulators had been worried that if Telefonica remained in the alliance, 02 would also have become part of it, making the company less likely to accept roaming calls from firms that were not members.

Also in the roaming alliance are Deutsche Telecom, France Telecom and Telecom Italia.


SEE ALSO:
O2 buoyed by surging user numbers
14 Nov 05 |  Business
Deutsche Telekom rules out O2 bid
02 Nov 05 |  Business
Telefonica bids 18bn for UK's O2
31 Oct 05 |  Business
O2 ups forecast for Germany, UK
27 Sep 05 |  Business
Telekom and KPN end O2 bid talks
16 Aug 05 |  Business
Telefonica bets on Latin America
08 Mar 04 |  Business


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