mmO2 takes GBP1.4 billion charge to exit Dutch market

14 Apr 2003

mmO2, the UK wireless operator which was spun off from the BT Group [London: BT.L] in November 2001, has said it will take a GBP1.4 billion (USD2.2 billion) charge to exit the Dutch mobile market. The operator has agreed to sell its underperforming O2 Netherlands subsidiary to buyout firm Greenfield Capital partners for USD26.9 million in cash. The Dutch unit reported sales of EUR200 million (USD214.9 million) in 2002 and a pre-tax loss of EUR51 million. However, the company is struggling to make an impression in the Netherlands’ market where mobile penetration stands at over 75%. O2 Netherlands has around 1.3 million customers and is vying for third place with Deutsche Telekom-controlled T-Mobile Netherlands (formerly Ben) and France Télécom-backed Dutchtone; market leader KPN and Vodafone unit Libertel control around 70% of the market between them. The mmO2 sale needs antitrust clearance and is expected to be completed by June; the GBP1.4 billion charge will be treated as an exceptional item in the group’s 2003 results.