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Spanish incumbent reportedly think it is better off with U.K. mobile operation in its portfolio.
Telefonica may decide against selling O2 UK after all, it was claimed on Friday.
An unnamed source cited by Bloomberg said the Spanish incumbent is still keen to pay down its debt, but now believes it will be better off holding onto to O2 than selling it.
O2 UK is the country’s second-largest mobile operator after EE.
In the three months to 31 March, O2’s mobile customer base increased to 24.93 million from 24.62 million in Q1 2015, as steady contract customer growth offset falling prepay customers. 4G customers almost doubled to 8.3 million from 4.91 million.
On the financial side, O2’s revenue fell to €1.75 billion from €1.85 billion a year earlier. However, lower costs meant operating income before depreciation and amortisation (OIBDA) grew to €461 million from €453 million.
Rumours about Telefonica’s presence in the U.K. have been rife ever since the European Commission blocked O2’s sale to CK Hutchison, which wanted to merge it with 3UK.
So far, it has been claimed that O2’s chief executive Ronan Dunne is in talks with private equity firms over a management buyout worth £8.5 billion (€10.78 billion).
Other reports have linked former EE chief and Virgin Mobile founder Tom Alexander with a private-equity-sponsored bid worth £10 billion, while another separate report claimed Apax Partners, CVC Capital, and KKR were considering a joint bid of £10 billion as well.
An IPO is said to be another option on the table.
