BT Tower

BT Said to be in “Early Talks” to Purchase O2 Back From Telefonica

November 24, 2014 - Written By Tom Dawson

 

If you’re old enough to remember a time when your monochrome Nokia listed “BT Cellnet” as your network provider, then this latest news might be something of a surprise to you. British Telecom sold O2 (formerly known as BT Cellnet) to European telecom giant Telefonica for a cool £17.7 Billion almost a decade ago and now, it sounds like they want to bring O2 back into the fold. Failing that, it sounds like BT has their eyes on bigger fish if Telefonica aren’t biting, with word that the company could be in talks with EE as well.

Reuters early today reported that Telefonica and BT are in the early stages of talks to sell O2 back to the UK giant for a 20% stake in the company awarded to Spain’s Telefonica in a “strategic alliance”. At the time, nobody at BT was keen to comment, but since then the Telegraph has been told by BT that they “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.” The company left the paper with the tantalizing news that “A further announcement will be made if and when appropriate.”

BT is a name that UK consumers, as well as businesses, will associate with broadband and traditional services, however over the past couple of years the company has expanded into new and relevant areas, like TV with their own Freeview-powered option backed up by BT Sport and the company even purchased some 4G spectrum from the Government’s auction held last year. BT doesn’t have the expertise or the scale to put that spectrum to good use however, and so worked out terms with EE to use their network as an MVNO, similarly to how Tesco Mobile uses O2’s network. BT then planned to fill in the coverage gaps using their broadband routers (hopefully not those in people’s homes) using their fiber optic network.

With word that BT could now be purchasing their own pet network, it could mean big things ahead for the UK industry. Having O2 return to previous owners and operate as they have done probably won’t change things much on the mobile side of thing. However, if BT can offer broadband, a landline, a TV subscription and a mobile plan all in one bill then it could have a big impact. Virgin Media already offers something similar, but the mobile plans included in their quad-play offerings are hardly exciting, and we’re pretty sure that BT would like to do things a little better, at least.