BT picks EE over O2 for £12.5 billion mobile deal

16 December 2014 |


BT Group has entered into exclusive talks to buy EE, Britain’s largest mobile network group, for £12.5 billion

BT had been in competing talks with Telefonica’s O2 and EE’s owners, Orange and Deutsche Telekom since late November.

A takeover of EE would make BT the UK’s largest provider of landline, TV, broadband and mobile services.

If the deal goes through, EE’s owners Germany’s Deutsche Telekom and France’s Orange would receive 12% and 4% of BT shares respectively.

"The proposed acquisition would enable BT to accelerate its existing mobility strategy whereby customers will benefit from innovative, seamless services that combine the power of fibre broadband, Wi-Fi and 4G,” according to a company statement. “BT would own the UK's most advanced 4G network, giving it greater control in terms of future investment and product innovation."

Negotiations will last several weeks before all parties come to a definitive agreement, it added.

This could in turn lead to competition issues in the UK market, as it would reduce the number of mobile players from four to three.

“Competition issues would be more relevant if Hutchinson Three turned their attention to acquiring O2, as some reports have indicated they were considering. This would see a change in the number of operators, something Ofcom has fought tirelessly to preserve,” said Matt Howett and James Robinson, analysts at Ovum.