Deutsche Telekom and Orange have disclosed that they are holding talks with fixed-line incumbent BT regarding the future of EE, the UK mobile operator they own together.
The admission follows days of speculation that EE was the other unnamed operator BT…
Deutsche Telekom and Orange have disclosed that they are holding talks with fixed-line incumbent BT regarding the future of EE, the UK mobile operator they own together.
The admission follows days of speculation that EE was the other unnamed operator BT was in discussions with when it confirmed it was holding talks for Telefonica’s O2 on Monday.
EE’s shareholders described the talks as “highly preliminary exploratory discussions”.
BT currently offers a mobile service to its business customers via an MVNO agreement with EE, and is planning to launch an MVNO service for its consumer customers on EE’s network by April 2015.
Deutsche Telekom and Orange had been planning to resume talks regarding a long-mooted IPO of EE shares before the end of the year. Gervais Pellissier, who oversees Orange’s stake in EE, said the timing would depend on fixed-mobile convergence in the UK.
In an interview with TelecomFinance last month, Pellissier said: “If we think fixed-mobile convergence is not something that needs to be done rapidly then we might reopen the IPO project.”
“If, on the other hand, we think fixed-mobile convergence will really start next year, then we might first work on partnership co-operations, maybe consolidation – I do not know – rather than trying to prepare an IPO.”
Analysts are in agreement that BT is in a strong bargaining position as the owners of both O2 and EE are willing to sell, and indeed both reached out to BT according to its statement on Monday.
BT would have to pay around €11.3bn for O2 and roughly €12.6bn for EE, according to estimates from an analyst at Mitsubishi UFJ. A Spanish report earlier this week suggested a figure of €14.1bn for O2 but a person familiar the situation downplayed that amount.
