BT, formerly known as British Telecom, is poised to buy UK mobile operator EE for £12.5bn, if Ofcom and other watchdog agencies approve the deal, reports C/Net. Under the terms of the proposed deal, EE’s owners Germany’s Deutsche Telekom and France’s Orange would take a 12% and 4% stake in BT respectively, according to the BBC.
EE, formerly known as Everything Everywhere, is a partnership between Gemany’s Deutsche Telekom and French company Orange, BT would become the owner of the UK’s biggest mobile phone operator and the most established 4G network, potentially adding 24.5m mobile customers.
The potential deal is subject to regulatory approval by competition authorities.
BT was considering snapping up either EE or O2. In November, BT announced the company was in preliminary talks to buy back the O2 brand for £6 billion. BT currently dominates the UK’s fixed-line markets, with landlines, broadband and TV already in place, but doesn’t currently have a mobile presence. EE now dominates the mobile marketplace in the UK. EE’s LTE spectrum portfolio is also stronger than O2’s.
If successful, the deal could result in BT dominating four media and telecoms services — a “quad-play”.BT currently dominates the UK’s fixed-line markets, with landlines, broadband and TV already in place. EE dominates the mobile marketplace in the UK. If successful, the deal could result in BT dominating four media and telecoms services — a “quad-play”.
“With its fixed-line and TV assets,” industry analyst Kester Mann of CCS Insight told CNET recently, BT “could assume a very dominant position. Rivals such as TalkTalk, Virgin, Sky and Vodafone will be concerned.”
Vodafone, a British multinational telecommunications company headquartered in London, is the world’s 3rd-largest mobile telecommunications company, behind China Mobile and SingTel, with 434 million subscribers as of 31 March 2014. Vodafone owns and operates networks in 21 countries.
EE was formed in 2009 by the merger of Orange, owned by France Telecom, and T-Mobile, owned by Deutsche Telekom. The two European companies have held a 50/50 stake.
The EE television service will offer 70 Freeview channels, a 24-hour replay service and extra on-demand and catch-up TV channels, including BBC iPlayer, YouTube, Demand 5, Daily Motion and Wuaki.tv. The set-top box contains a one terabyte (TB) hard disk, which the firm said could store up to 25 days worth of standard definition content and five days worth of high-definition shows.
“Today we’re taking EE somewhere completely new. We’re going to introduce EE TV, a personal TV that puts mobile at heart of the home TV experience,” EE CEO Olaf Swantee said.
The service will be free with EE’s home broadband and landline packages, but will cost from £9.95 per month for EE mobile customers. The replay and recording features help in differentiating it from similar offerings by BT or Netflix. Vodafone has also been pursuing a similar quadplay strategy in other European markets.
The launch of the service brings EE into competition with the likes of Virgin Media and BT, which will reportedly launch consumer mobile services in the first quarter of the next year.
BT’s plan is to undercut mobile operators by enabling calls and data use via its 5.4 million wifi hotspots instead of 4G networks. BT also bought a ton of 2.6 GHz spectrum in the UK’s auction last year, as did Vodafone and EE.
Some 13 years ago, BT spun off their cellular holdings to O2. BT is now expected to entice customers by offering full packages covering broadband, TV, mobile and fixed line phone services using its 2.6 GHz frequency, and re-enter the consumer mobile market.
The UK has decided to break the 190 MHz-wide band of 2.6 GHz frequencies into two groups, 140 MHz of paired frequencies and 50 MHz of unpaired.
United Kingdom has a total of 80 million subscribers, with a 130.55% penetration rate. Mobile operators in the UK include:
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