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BT in early stage talks to buy O2 and re-enter mobile market


BT plans to rejoin mobile market

BT plans to rejoin mobile market

BT plans to rejoin mobile market

BT is weighing up a bid to bring its former mobile phone division O2 back in-house 13 years after spinning off the business. The telecoms giant is in early stage talks to buy the firm, or its rival EE, as it forges ahead with plans to re-enter the mobile market.

BT said it had been approached by the owners of two networks over a deal. O2 is owned by Telefonica while EE is held by Orange and Deutsche Telekom.

Reports have suggested either business could be valued at around £10bn while it has also been suggested that Telefonica could be given a 20% stake in BT in any deal - a portion worth around £6bn. BT did not comment.

O2, formerly known as BT Cellnet, had been spun off from BT in 2001 before being bought by Spain's Telefonica for £17.7bn in 2005.

BT yesterday responded to reports in Spain about a possible deal in a statement which named O2 but not the other operator potentially in its sights, which is understood to be EE.

BT said: "We continue to develop our own plans for providing enhanced mobile services to business and consumer customers, in line with our previous announcements.

"We remain confident of delivering on these plans and have also been exploring ways of accelerating them, including assessing the merits of an acquisition of a mobile network operator in the UK.

"We have received expressions of interest from shareholders in two UK mobile network operators, of which one is O2, about a possible transaction in which BT would acquire their UK mobile business.

"All discussions are at a highly preliminary stage and there can be no certainty that any transaction will occur.

"A further announcement will be made if and when appropriate."

Investors cheered the announcement, with shares rising 3%.

In July, BT took its first big step back into the mobile phone market as it launched a new business service aimed at delivering fixed line and mobile calls to the same handset.

It is already planning to launch a mobile phone business for the wider public by the end of the current financial year to the end of March.

Belfast Telegraph