Mobile network takeovers: O2 and EE

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Mobster
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Posted this on another forum but would also be interested in what you guys have to say?

Rumours are strong that BT plans to buy either O2 UK or EE. BT is supposedly is more interested in EE than O2 but BT would apparently "settle" for O2.

Hutchison are also considering purchasing O2 (Hutchison being 3 UK's parent company), should BT purchase EE or BT's talks with O2 fall through. These rumours have been going on for many years but have been re-lit recently after Hutchison purchased O2 Ireland.

What does everybody think about this?
 
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This is a lot more complicated than the press are saying IMO and there's a huge amount at stake. BT are after a decent quad play (fixed, mobile, tv and internet) but with their main sources starting to creek, they need to transform to stop the slide.

Recently around the EU Voda has been on something of a shopping spree after selling their Verizon stake as Voda want quadplay in every market they can, for the right price (DE/ES next). This means either teaming up / buying Sky or Virgin (which is the latest rumour - Voda buys liberty) in the UK domestic and you don't really want to be second in the race to a decent quad play - other markets have shown that the first past the post should enjoy a healthy lead for a bit.

This leaves us with EE & O2. EE actually have their interconnects with BT (unless something changed in the last 3 years or so) which would be nice and handy but the bigger prize is they can buy a super large network with the biggest customer base with little overlap to both businesses. Both of the 50% EE owners, DTAG and Orange (formerly France Telecom) are open to sale and were open about this during the T-Mo/Orange merger (assuming they didn't float). Both companies have had better days, cash would be nice, the UK market is saturated and they won't quad play any time soon. I think they will sell.

Hutch buying O2, eh maybe. I'm not sure it's a great match as they would be partaking in another network share and the companies are miles away from each other in structure (3 outsource every little piece of their business, if you pass the huawei building on the M4 at green park / Reading you could wave to half of three ;) ). Would make them super huge but it's got a fair amount of downside / overlap.

I think it's an extremely volatile, billion pound game of risk right now :)
 
Doesn't BT also own some 4G spectrum? Although not much to start their own network, hence why they probably want to take over a current one.

Considering how large BT is with the landline and broadband I don't think it's a good idea for them to buy EE, that will give them a massive advantage due to size. Personally I would be more happy for them to buy (back :p) O2 and bring them to competing levels to the other networks. O2 has good coverage but 3G and 4G speeds seems to be poor compared to EE and 3...

Would be interesting to see 3 buy O2 on the other hand, but as mentioned above it would take a long while to fully merge their infrastructures. However how they will turn out after that could be pretty good for UK customers if it works out...
 
I don't see there being an issue with a 3 + o2 or BT + EE merge, at least in terms of market share, I'd imagine some of the frequency spectrum might need reselling.

3 + o2 would give ~ 18 million subscribers, which would be 3rd behind Vodafone (~19.5 million) and EE (28 million).

I can see an issue if 3 and EE merged though, that'd be ~36 million subscribers...

It'll be interesting to see what happens though, I'm with BT for my broadband so a free/cheap deal might be nice, and on the other hand currently with 3 PAYG for mobile so more coverage is always good. Roll on the mergers :p
 
Orcvader said:
Doesn't BT also own some 4G spectrum? Although not much to start their own network, hence why they probably want to take over a current one.
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They have a matched pair and a bulk lot. The matched could be used for 4G (@2.6gig iirc) but the bulk lot is useless for the UK right now. It's not a big deal, it was a matched 20mhz or below band at 2.6 and while it's nice, it's really only good for capacity in metro areas. While the other networks would cry (because why not ;) ) I don't think they would care too much. If it was a big chunk of 800Mhz it would be a bigger deal, that stuff is true gold right now.
 
Saw the register article earlier. Would struggle to see how any competition regulators would allow BT to buy up EE.

If it should happen, what's the thoughts on new name. BEET ? BTEE (phones home) ?
 
I think it's bad news for O2 really, it would have been good to see them set free from Telefonica. Now you have BT/EE and Vodafone/Sky with some fantastic content offerings and Three are absolutely killing it on the 'just being just a mobile network' side.
 
Some expert on the radio reckons the tables have turned positive for BT. That there isn't much profit for existing mobile providers and that this is the perfect time for BT to buy back in at an estimated £12 billion. He said EE are the largest network providers with something like a 25 million customer base, and that is the jewel in the crown that BT wants.

Worries me tbh as an existing EE customer. I get discounted monthly rental because a family member works at EE head office, but I hope BT don't screw that up.
 
I'm more scared of how big and dominating BT will look, with the biggest landline network as well as perhaps the biggest mobile network.
 
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