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Tesco Mobile Seeking to Buy Out Mobile Network Joint Venture

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UK based MVNO, Tesco Mobile is reportedly seeking to buy out its airtime partner and switch to a different network.

Tesco Mobile was set up in 2003 as a 50:50 joint venture with O2, but is now seeking to take advantage of the regulatory concerns about the merger of O2 and Hutchison 3G UK.

Hutchison Whampoa is reportedly keen to sell the stake to Tesco Mobile, as a way of assuaging regulators concerns that the merged O2/Three networks would have too large a market share.

Tesco Mobile for its part is said to be looking to secure an improved deal with Three if it can secure sole ownership of the MVNO.

The merger of O2/Three has been predicted to lead to an average increase in phone bills of 6 percent due to the reduction in competition in the market. The same analysis expects that the rise would be limited to 5 percent if Tesco Mobile were independently owned.

Tesco Mobile has around 4.5 million customers, and buying out O2's stake would cost around £300 million.

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Tags: tesco mobile  mvno  UK