Telecoms group BT has been in early stage talks to buy either EE, the wireless group owned by Deutsche Telekom and France's Orange, or O2. The latter used to be BT's mobile arm (under the name Cellnet), before it was spun off in 2001. Spain's Telefonica bought it in 2005 for £17.7bn. Telefonica is exploring options for its UK business, while EE had admitted it is considering merging with a fixed-line operator.
What the commentators said
Meanwhile, telecoms and TV are converging, added Alistair Osborne. The name of the game is "quadplay", or four services on one bill: mobile, fixed-line, broadband and TV. BT has accelerated the trend by buying TV programmes from Sky, notably Premier League football. BT is now only missing mobile, while EE and Telefonica have only a few broadband customers.
O2 could be had for just over £9bn, reckoned Lex in the FT. EE would cost more as it has more subscribers (25 million, compared to 22 million) and a better footprint in 4G technology say £11bn. But BT could pay in shares, or borrow and still have a reasonable debt load. Plenty of other quadplay deals are likely to follow. TalkTalk could be interested in whichever mobile network is left over, while Sky could consider investing in mobile if BT starts to draw customers away.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
BT, said Daniel Thomas in the FT, "is going to continue to shake up the once sleepy UK telecoms sector".
-
BT is making progress and the dividend is back – but is it time to buy yet?Analysis Investors in telecoms giant BT have seen dismal returns over the last 15 years. But there are signs that it is starting to turn things around, says Rupert Hargreaves. So should you buy BT shares?
-
Accounting scandal wipes 20% off BT’s sharesFeatures BT’s share price fell by almost 20% last Tuesday, after an update on an accounting scandal in its Italian business led to a profit warning.
-
Football’s £5bn bonanzaFeatures Competition between Sky and BT for rights to screen the footie has handed a £5bn windfall to the English Premier League. Can that really be a good deal? Simon Wilson reports.
-
Sell your telecoms shares – this merger madness is bound to end in misery
Opinion A lot of money will be spent in the telecoms tie-up frenzy – but much of it will be wasted, says Matthew Lynn.
-
Vodafone takes fight to BT
News Telecoms giant Vodafone has vowed to take on BT in the broadband and television market.
-
Company in the news: BT
Features BT is a company in rude health, but support for the share is waning, says Phil Oakley.
-
Why higher interest rates could be good news for BTFeatures A rise in interest rates could deliver a nice boost to BT, one of Britain’s largest companies, says Phil Oakley. Here’s why.
-
BT’s football coup
Features BT has made an aggressive move into the pay-TV sector, snatching lucrative football rights from Sky and ITV. But has it paid too high a price? Simon Wilson investigates.
