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BT in talks to buy UK’s O2 and EE mobile networks

November 24, 2014 - Martin Hoscik@seenituk

BT Centre in Newgate Street, London. Image: BT/Vismedia
BT Centre in Newgate Street, London. Image: BT/Vismedia
BT has confirmed it’s considering buying a UK mobile phone network after being linked with a possible takeover of O2.

The ISP and pay-TV giant is expected to launch a new consumer mobile service in the coming months, allowing it to offer ‘quad play’ packages of TV, home phone, broadband and mobile.

Following reports in the Spanish media, the company confirmed it has held talks with O2’s parent company Telefonica to buy back its former Cellnet division.

The company was floated in 2002 as part of a debt repayment plan by the then troubled UK firm which has seen its fortunes improve in recent years, thanks in part to its investment in top sporting content.

According to the reports, Telefonica would receive a 20% share in BT in return for its entire interest in O2.

BT has confirmed that talks have been held but insists they’re at a “highly preliminary stage” and says there’s no guarantee of any deal being done.

In a statement the firm reveals it’s also been approached by shareholders in a second UK mobile network, likely to be Deutsche Telekom and Orange who own EE, about a possible deal.

Any deal would provide BT with millions of new customers to whom it could market its phone and broadband services and TV platforms and guarantee it access to the latest handsets, boosting the attractiveness of its mobile offering.

BT said: “We continue to develop our own plans for providing enhanced mobile services to business and consumer customers, in line with our previous announcements.

“We remain confident of delivering on these plans and have also been exploring ways of accelerating them, including assessing the merits of an acquisition of a mobile network operator in the UK.

“We have received expressions of interest from shareholders in two UK mobile network operators, of which one is O2, about a possible transaction in which BT would acquire their UK mobile business.

“All discussions are at a highly preliminary stage and there can be no certainty that any transaction will occur.”

Commenting on the potential for a deal, Imran Choudhary, senior analyst at Kantar Worldpanel, said: “BT has invested close to £1 billion into its TV packages, particularly on acquiring football rights, and holds the largest share of consumer broadband in the UK, but it has struggled to move into mobile in the past.

“Acquiring one of the largest networks in the country would give it instant access to an established customer base, allowing it to tap into and cross-sell its internet, TV and landline packages.

“O2 would be a good fit as nearly a third of its customers already source their home broadband from BT.”

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Tagged With: BT, EE, O2, Telecoms

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