O2 buys The Link

Mobile operator O2 continued its shopping spree on Wednesday by taking over independent mobile phone retailer The Link.

Dixons parent group DSG International, which also owns Currys and PC World, decided to get out of the mobile market by selling its 60 per cent share in The Link to O2, which already owned the remaining 40 per cent, for £30m.

The Link has performed poorly in the face of competition from the likes of Carphone Warehouse, and most of its outlets are likely to be rebranded as O2 stores.

A spokesperson for O2 told silicon.com sister site ZDNet UK on Wednesday that where there is an overlap between existing O2 stores and those of The Link, some stores would be run "independently as The Link, with a view to selling them in due course".

O2 said it was "too early to say exactly how things will ultimately play out" regarding potential job losses, stressing it would be "several weeks" before details were agreed with The Link.

The O2 spokesperson said: "It's both strategically and financially right for us. We see it as a way of accelerating our growth and boosting our brand presence on the high street."

O2 currently has around 350 high street stores but taking over The Link could potentially double that number.

Disruptive Analysis analyst Dean Bubley said: "From O2's point of view, if their retail strategy is working, then getting more of it seems like a good idea."

Bubley believes O2 is getting "quite a good bargain" on the deal, due to the costs involved in acquiring new retail sites from scratch.

He also suggested that, with the dawn of fixed-mobile convergence (FMC) devices working on multiple networks - such as the wi-fi/GSM devices being introduced by BT and Orange - operators will want greater control over their retail channels.

Bubley said: "Owning the distribution allows operators to demonstrate new services to customers on actual devices," pointing out that O2 will now be able to train The Link's staff "to be experts in O2's services".

He added: "It's essential if operators are to sell phones and services that get widely used for, say, mobile TV, then you have to get past the plastic-phone-nailed-to-the-wall syndrome."

On Tuesday O2 announced it had acquired Be, a high-speed broadband provider, for £50m. O2 said Be was an attractive purchase due to "its infrastructure, the quality of its network, the quality of its management and its rollout plans".

David Meyer writes for ZDNet UK