Ka-shing! Mobile phone network Three to buy rival O2 for £10bn

One of the richest men in Asia is in the process of creating the biggest mobile phone network in the UK. Li Ka-shing, who has an estimated fortune of £25.5billion and owns the company that owns Three, is set to buy rival network O2 for more than £10billion.

Li's Hutchinson Whampoa conglomerate and Telefónica, the Spanish telecommunications company that owns O2, have said the negotiations are exclusive and will last "several weeks".

If the deal goes through, the number of major mobile networks in the UK will be reduced from four - EE, O2, Three and Vodafone - to three, sparking concern that less competition will lead to bigger bills and less calls, texts and data for customers.

Three's current strategy is to offer unlimited data and allow you to use your phone abroad at no extra cost in order to keep up with its larger competitors. If the deal goes through, Three will no longer be chasing customers, meaning prices may become less competitive.

Dominic Baliszewski, our telecoms expert, said: "Competition is always good for customers because this leads to cheaper prices and better deals, but if O2 and Three combine this would mean the UK goes from four major mobile networks down to just three.

"This could potentially lead to a worse deal for customers over the next few years as fewer players means a reduced fear of customer churn - a side effect of market consolidation which has been observed in other countries."

He added that, if you're on O2 or Three, you don't need to do anything for the time being other than keep an eye out for emails or letters from them, but that in the longer term you should make sure you're getting the best terms from the merger and, if you find you're left worse off, you should shop around for a better deal and switch networks.

Sources: The Guardian, The Wall Street Journal

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