Fibre broadband and 4G telephony will come together through BT’s successful bid for mobile company EE.
The UK telco is to pay £12.5 billion for the Deutsche Telekom-Orange JV that is the biggest mobile telephony company in the UK. It currently holds 31 million customers including 24.5 direct mobile customers and 834,000 fixed broadband customers.
EE also supplies an MNVO service to BT’s rival Virgin Media.
BT now plans to upsell its broadband, fixed telephony and pay-TV services to those EE customers who do not currently take a service from BT.
“This is a major milestone for BT as it will allow us to accelerate our mobility plans and increase our investment in them. The UK’s leading 4G network will now dovetail with the UK’s biggest fibre network, helping to create the leading converged communications provider in the UK. The enlarged BT will offer significant opportunities for employees as we lead the creation of a world-class digital infrastructure for Britain,” said BT chief executive Gavin Patterson.
BT is funding the purchase through new debt financing and approximately £1bn from the placing of new BT shares. The Equity Placing will be launched in due course
Following the Transaction and Equity Placing, Deutsche Telekom will hold a 12% stake in BT and will be entitled to appoint one non-executive member of the BT Board of Directors. Orange will hold a 4% stake in BT.
EE was formed in 2010 from the merger of Orange and DT’s operations in the UK: Orange UK and T-Mobile UK. The current wave of merger activity is expected to continue with the sale of O2 – once BT’s own Cellnet mobile network – to Hutchison Whampoa, operator of 3.
