O2’s £10bn flotation is put on hold



Telefonica has been eyeing a cash-raising on O2 as a carries of driving down its £42.7bn debt

The firm, owned by Spanish telecoms superhuman Telefonica, had been awaiting the outcome of a radio spectrum sale from day one set for later this year, but the auction has been knocked back into 2018 go a legal challenge from rival operators.

Telefonica is understood to take wanted the auction out of the way before triggering the initial public offering to ban any uncertainty dogging its potential.

While the operator made no firm commitment to organize this year, it was deemed possible that an IPO could be launched if hawk volatility subsided and the airwaves auction went ahead as planned.

Telefonica has been purposing a cash-raising on O2 as a means of driving down its ¤48.5billion (£42.7billion) liable pile. However, the need to float the British mobile network to originate funds is now less pressing, as the Spanish group’s cash flow innervates. 

Telefonica revealed that it would explore a London heel of O2 in September 2016 after a tie-up with rival operator Three collapsed. The European Commission had formally chunked Hong Kong-based mobile operator CK Hutchison, which owns Three, from distance oneself from a shove off through a £10.3billion takeover of O2 in May last year.

Despite expects of getting the IPO off the ground in 2016, Telefonica has paused until this year, with the airwaves auction a constituent in when to push the button. Ofcom revealed the rules in July for the non-stationary spectrum auction to meet the insatiable demand for data from UK smartphone consumers.

The telecoms regulator said the auction would support 5G mobile and raise the available airwaves for mobile devices by a third. It plans to auction entitlements to use 190 MHz of spectrum in two frequency bands.

The 40 Mhz of spectrum would be auctioned in the 2.3GHz troop – used for 4G and already supported by some smartphones – and 150 MHz of spectrum in the 3.4Ghz combination, which is crucial for the introduction of 5G and would not be available until 2020. 

However, transportable operators Three and BT’s EE have made legal challenges to the process.

Three is holding that the auction would hamper competition by allowing Vodafone, BT and O2 to claim too much of the movable spectrum. Ofcom wants to put in place a 37 per cent cap, which Three hungers the watchdog to curb further.

Meanwhile, EE has claimed that Three’s beg to reduce the cap would harm its efforts to bid in future auctions.

O2 declined to say discuss on the timing of the IPO.

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