EE in sales talks with BT

EE owners Deutsche Telekom and Orange eye up a sale to BT just days after news O2’s owner is also looking to exit the UK market

Deutsche Telekom and Orange, the owners of mobile network operator (MNO) EE, have been holding preliminary talks with BT over the possibility of selling off the UK business, it has now emerged.

The news came barely 48 hours after BT revealed it was in talks to reunite with its old flame O2, which shacked up with current owners Telefónica in 2005 after splitting with BT four years previously.

In a brief statement, EE said its joint shareholders often had their ears close to the ground to analyse the development of the UK market and evaluate “various strategic options, which have the potential to create value for EE’s shareholders and strengthen the market position of EE”.

“As one of these options, Deutsche Telekom and Orange are in highly preliminary exploratory discussions with BT, although it is too early to state whether any transaction may occur. Deutsche Telekom and Orange will make further announcements if and when appropriate,” said the firm.

T-Mobile and Orange got together back in 2009, although it was another year before Everything Everywhere, later shortened to EE, was officially launched to the market. It has since established itself firmly as the largest MNO in the UK and was the first operator to launch 4G services in Britain.

This is not the first time the network has become the subject of speculation around its future. In 2012, Computer Weekly reported Deutsche Telekom was looking for an exit strategy to try to raise money, after it failed to sell off T-Mobile in the USA.

It would make more sense for BT to buy EE than it would to buy O2, according to Gartner’s Charlotte Patrick.

This is because O2 has a vastly more established brand in the UK. With EE having only recently finished re-badging its various T-Mobile and Orange components under one umbrella, it would be easier for BT to expunge it from the public consciousness, should it so wish.

An outright takeover would bring the curtain down on BT’s plans to become a mobile virtual network operator (MVNO) using EE’s network.

In October 2014, it was widely reported the MVNO joint venture between the two firms was being hampered by technical issues around voice and data traffic hand-off from wireless to mobile networks – something BT denied.

BT owns two lots of 4G spectrum itself but has never committed to running its own service over it.

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