Buying EE will give BT the biggest 4G network in the UK which it is says will complement its fibre network.
BT had been using EE’s network for its mobile virtual network operator deal, but hopes the deal will enable it to create a complete network for its customers so they are using its services, whether at home on fixed connections or on the go using the mobile services, or its existing WiFi services.
It also gets 24.5 million customers currently on the EE network.
We expect to see deals involving telephone, mobile phone, broadband and mobile services in one bundle.
BT accountants already think that they will save a pile through network and IT rationalisation as well as in areas of procurement, marketing and sales costs.
Still it is bad news for O2 which was touted to be the other company that BT was thinking of buying. The decision not to go with O2 will be a blow to the Spanish Telefónica which had been keen to flog its business unit in the UK.
If approved the deal will mean Deutsche Telekom as a 12 percent share in BT and a seat on the company’s board. Orange will take just a four percent share and will not have a seat on the board.
It is not all clear sailing though. The deal has to be approved by the Ofcom regulator. While it is not likely to block the deal, the combined entity could be forced to dispose of some spectrum. BT’s Openreach and Wholesale units might have to be hived off from the main company.