The former state-owned telecommunications company, BT, has officially announced that it plans to purchase EE, in a deal worth a reported £12.5 billion.
BT has been in the market for a mobile phone network over recent months, with earlier stories suggesting that it was deciding between opting for a deal between EE or O2, but has now settled with EE.
A statement issued by BT states that the company has now entered into an exclusive agreement with EE’s owners in relation to its acquisition of the company. This basically means that as the two companies hash out the deal, that nobody else can come in and try and make a purchase.
The agreement will last at least a couple of weeks, depending on how long it takes BT to complete its due diligence for completing the deal.
EE is regarded as the UK’s market leader when it comes down to 4G service, offering the fastest speeds and widest coverage of the mobile service. It’s been active on the market since 2010, after T-Mobile and Orange merged to form the joint network.
EE currently has 27m customers, making it the most popular mobile network on the market as well, something which is likely to have sparked the interest from BT.
The purchase of EE would give BT a four way play on consumers which is now referred to as ‘quad play’, which is similar to that offered by Virgin Media.
Quad play is the term used when offering a joint deal with your mobile phone, TV, landline phone and internet, something which is popular in parts of continental Europe.
Virgin has struggled to build the deal effectively, mainly because of its reputation on the mobile market. BT won’t be facing this issue with EE, with it already being one of the most trusted names on the market.
This is exactly why BT is happy to pay such a high price for EE, instead of saving by heading to O2’s door. Also, EE’s mobile infrastructure is the best in the business right now, with faster mobile speeds already in service.
BT has also built its chances of getting custom up by using its considerable wealth to pay for Premier League football rights, reducing the number of games held exclusively by Sky, making BT a very viable option for TV fans.
All of this comes after BT was forced to sell up its mobile operations sector over a decade ago to cut its sizeable debt.
Ofcom is likely to scrutinise the deal before it goes through to ensure that all details are correct and that no laws are being broken. However, it’s expected that Ofcom will allow the deal to go through, whilst competitors to EE and BT are likely to file complaints.
Written by Luke Hatfield