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BT Bid to Purchase O2 “Iminent” as EE Purchase Poses Regulatory Hurdles

December 10, 2014 - Written By Tom Dawson

 

Towards the end of last month, there was a lot of buzz swirling around BT, O2 and EE. That’s because BT finally felt like they wanted to take the mobile market seriously again and put a purchase of either O2 or EE in motion. It was confirmed by both O2 and EE that BT was indeed in talks with them to reach a potential acquisition, and now it seems BT has settled on their old friend O2. Currently owned by Telefonica, a Spanish telecommunications firm, O2 UK has 24 Million customers and bringing the network BT sold back in 2005 for a whopping £18 Billion back into the fold.

According to report from This is Money, BT have settled on O2 as their mobile network of choice, as the larger EE would pose some serious regulatory hurdles to get over. The difference being that not only is EE a larger network (with 27 Million customers over 24 Million), but EE also operates a home broadband service and with BT already controlling the majority of Broadband in the UK, adding EE would just create an even larger entity. According to the report, BT is looking to seal the deal with Telefonica before Christmas, with a move to sell their own devices in the Spring of next year.

How large a bid BT will put in for O2 is unclear at the moment, but we doubt that the network will come cheap, especially considering the company’s size and their established presence in the wireless market. No matter what happens though, it looks like BT is ready to jump in to the mobile industry, with or without O2. The company already owns a little 4G spectrum and a deal with EE to operate a virtual network, similar to Tesco Mobile’s arrangement with O2, has already been signed. Obviously, purchasing O2 would make things much easier for BT and give them a much better product to offer, but we’ll have to wait and see if Telefonica and BT can come to a deal before the year is out.