BT in talks to acquire a UK mobile operator, sights on either O2 or EE

24 Nov 2014

UK telecoms giant BT is in early stage talks with a view to acquiring a mobile phone business, either O2 which is owned by Telefónica, or EE, which is owned by Deutsche Telekom and France Telecom.

In a brief statement BT said: “All discussions are at a highly preliminary stage.”

The acquisition of O2, if it succeeds, will see O2 return to the BT fold. BT sold O2 to Telefónica in 2005 for stg£18bn. O2 was originally formed in 1985 as Cellnet, a 60/40 joint ventue between BT and Securicor.

In recent months Telefónica sold O2 Ireland to Hutchison Whampoa’s mobile brand Three for around €850m.

However, Everything Everwhere (EE), which is jointly owned by Deutsche Telekom and France Telecom, has also been tipped as a potential acquisition target for BT.

Bouncing back from a blunder

BT’s decision to exit the mobile network market in 2005 has been cited as one of the biggest and most serious strategic blunders in telecoms industry history.

The deal occurred just two years before Apple revealed the iconic iPhone and changed the mobile industry and computing forever.

In a statement 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,” BT said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years

editorial@siliconrepublic.com