UK mobile operator Everything Everywhere (EE) is still deciding on which bank to oversee the sale of spectrum it is required to divest this year.
Speaking to TelecomFinance today [Friday, 24 February], a spokesman reaffirmed that an “agreement is…
UK mobile operator Everything Everywhere (EE) is still deciding on which bank to oversee the sale of spectrum it is required to divest this year.
Speaking to TelecomFinance today [Friday, 24 February], a spokesman reaffirmed that an “agreement is still not signed”, adding that the company was going through “final approvals”.
He declined to comment on the banks that have been shortlisted, although the Financial Times reported earlier this week that EE would likely pick Morgan Stanley for the job. This is in spite of previous reports having claimed that the operator, a Deutsche Telekom and France Telecom joint venture, was in exclusive talks to mandate RBS.
EE, which had previously planned to hire a bank before the end of January, needs to divest 25% of its 2G spectrum in 2012 to satisfy European Commission conditions that are tied to its approval for the creation of the JV.
The group was required to offload 2X15 MHz of its 1800 MHz frequencies, although TelecomFinance understands that it has asked the EC to decrease this amount.
Local rivals Vodafone and O2, whose spectrum is predominately in the 900MHz band, are likely to be the frontrunners for the additional spectrum. As demand for mobile broadband continues to skyrocket, Hutchison-owned 3 UK, the country’s smallest operator, would presumably also be interested in the extra capacity.
EE is looking to sell the frequencies before the UK’s long-awaited 4G spectrum auction, which local regulator Ofcom plans to launch in Q4 2012.
However, it has emerged that the operator could launch 4G services before additional frequencies are awarded.
Ofcom is due to announce at the end of March whether the group can use its existing spectrum for use with 4G technology. Last year, the regulator allowed operators to use their 2G frequencies for 3G use, and EE claims its request for further liberalisation is in line with EC guidelines aimed at fully utilising superfast technology.
Meanwhile, reports that Deutsche Telekom could be looking to exit its 50% stake in the JV, after failing to sell its mobile operator in the US, have been generating a lot of media interest.
Citing sources, a Bloomberg report claimed the German incumbent is set to decide whether to exit EE by the end of this year, adding that no banks have been hired for the process because it is still at a very early stage.
Deutsche Telekom and EE have both declined to comment on the speculation, but the CEO of France Telecom has since been cited expressing scepticism over the reported rumours.
Stephane Richard was quoted telling Reuters that he had not had any contact with the German group that would signal they were looking to exit EE. Richard also downplayed suggestions that it could look to stage a buyout.
Reports explain that Deutsche Telekom’s need to raise cash has become more pressing since the group’s US$39bn sale of its US operations was blocked by regulators.
But also helping to fuel rumours that EE could be looking to move on from its founding parent groups has been its shift towards operating as an independent financial entity.
With EE’s first independent banking facility in late 2011, followed by its first bond in February 2012, industry spectators have suggested that the company could go a step further and fully move on from its JV owners.
