BT’s deal to buy EE has been confirmed, just six weeks after the telecoms giant said that it had entered talks regarding the takeover of the UK’s largest mobile network.
It comes at a time of great flux in the industry, when Three is looking to buy O2 and Sky is making moves to set up its own mobile network in 2016.
Confused by what it could mean for you? Here are five things you need to know about the BT and EE tie–up.
1 The cost
BT is paying £12.5 billion for EE. That will be a mix of both cash and shares, payable to EE’s current owners Deutsche Telekom and Orange.
The latter is being given a 4% stake in BT, while the former gets 12%.
That number compares to the £10 billion being paid by Three owner Hutchison Whampoa for O2 and represents good value seeing as BT sold off O2 a decade ago for around £17 billion.
2 It’s not all signed off yet
Despite BT saying it has reached an agreement, there’s a long way to go before it officially owns EE.
For one, it’ll need to get clearance from regulators at Ofcom. Then it’ll need to convince competition watchdogs that merging two such companies does not represent a bad deal for the consumer.
Bringing together BT’s extensive broadband network and EE’s leading 4G coverage is appealing, but could lead to some concerns that smaller rivals will not be able to compete.
3 The EE brand is being retained. For now.
BT CEO Gavin Patterson has said that: “Initially, we’ll keep the EE brand.”
However, that leaves open the prospect of BT one day canning a brand which has only existed since Orange and T–Mobile merged in 2010.
Having a BT brand to cover phones, TV, broadband and landline would surely be more appealing.
Expect BT to ditch the EE name not long after its been given the green light by regulators.
4 Bills: Up or down?
The big question. Patterson said that “consumers and businesses will benefit from new products and services as well as from increased investment and innovation".
But there was no word on whether prices would go up. For standalone mobile deals, BT could easily creep prices up, especially as Three/O2 and Vodafone will be its only major competitors.
But that’s where quad–play comes in.
BT’s deal for EE is all about selling TV, landline, broadband and mobile in one package.
With competition hotting up in this space, this is most likely to be the best area for consumers to make a saving.
Sky’s new mobile network will have BT worried and the two are likely to duke it out on price, especially as both can offer the sweetener of Premier League football to customers.
With Champions League on BT too from next season, don’t be surprised to see cheap deals with sports bundles and knockdown mobile contracts to entice customers across to the newly merged comms powerhouse.