British incumbent BT has said it is in talks to buy back UK mobile operator O2 from Telefonica.
It is also in discussions with an as-yet-unnamed mobile operator, according to a filing with the London Stock Exchange.
Telefonica confirmed the discussions…
British incumbent BT has said it is in talks to buy back UK mobile operator O2 from Telefonica.
It is also in discussions with an as-yet-unnamed mobile operator, according to a filing with the London Stock Exchange.
Telefonica confirmed the discussions in a statement to the Madrid bourse. The clarifications follow press speculation that the two companies were close to an agreement, but both said today that talks are at a “highly preliminary stage”.
In a filing, BT responded to the reports by saying it had received expressions of interest from shareholders in two UK mobile network operators regarding transactions where BT would acquire their UK mobile business.
BT currently offers a mobile service to its business customers via an MVNO agreement with EE, the UK mobile joint venture held by Orange and Deutsche Telekom.
A report has subsequently suggested EE is the other operator BT is in talks with, but BT declined to comment and EE did not respond to a request for comment.
In its statement, Telefonica said it “regularly analyses the evolution of the markets in which it operates, together with the different strategic options available to create value for its shareholders and reinforce its financial position”.
Both telcos said there was no “certainty that any transaction will occur”.
BT’s CEO Gavin Patterson has said it plans to return to start offering mobile services also to the consumer market by April 2015 and that it will start with an MVNO via EE’s network. This will enable BT to offer a quad-play service which could spark a shift towards convergence in the UK telecoms market.
BT launched its mobile service for its business customers, through its One Phone offering, in the summer using EE’s network.
Speaking on a conference call on 12 November, Telefonica CFO Angel Vila commented on the potential factors for convergence taking off in the UK: “One [factor is] the strategy that BT will take on its mobile launch, the aggressiveness that BT would take on their mobile launch, and the kind of commercial offers that they would put on top of the table.
“We do not see today the UK as a strong convergent market and we anchor that statement into the fact that consumer’s behaviour for the time being has shown limited interest on the converge proposition.”
O2 was created by BT in 2002 when it was rebranded from BT Cellnet and spun-off into a new listed company. Spanish incumbent Telefonica bought the business in 2005 for £17.7bn.
BT is the UK’s incumbent fixed-line operator offering landline telephone services and broadband via copper and fibre. It also offers IPTV services and has invested in content, acquiring a substantial amount of sports rights – including Premier League and UEFA Champions League – as it looks to rival the dominance of Sky.
