The BT board has been locked in discussions over the possible acquisition of mobile network operators (MNOs) O2 or EE, according to reports.
A decision is expected in the next 10 days, a source familiar with the situation told the Reuters news agency.
Whichever MNO BT settles on – both have merits and drawbacks – the move will very likely kick off an arms race of acquisitions in the UK communications sector.
Rumours have already been circulating that Vodafone and Hutchison Whampoa, the owner of Three, may both reach into their pockets soon, with Vodafone thought to be eyeing up a merger with Virgin Media’s owners, and Hutchison Whampoa also looking at one or other of O2 or EE.
O2 is still seen as the less risky option for BT, with a smaller customer base and a sole owner, Spain’s Telefónica, making for smoother negotiations.
EE, formed from the combination of Orange and T-Mobile, is far larger, but would give BT a much stronger network presence and may be easier to integrate, as it is a relatively young brand.
However, the presence of two owners – Orange and Deutsche Telekom – would make takeover talks harder. Also, because it would make BT the largest communications provider in the country, an EE purchase would be likely to fall foul of the regulators – a scenario BT would prefer to avoid.
Either deal would cost BT at least £9bn.