What Does the BT – EE Deal Mean?
2015 began with the news that BT and EE were in talks for a complete acquisition, and now, as we approach 2016, it finally looks like that deal might cross the line and come to fruition. It’s been a long road, especially from the companies involved, who have undergone a large amount of regulatory investigation. For the rest of us though, the deal has been viewed with a certain amount of confusion. After all, what would BT even want with EE, and is this going to affect current customers? There are no easy answers to either of those questions, but we’ll endevour to deliver both to you in this article, so join us as we do just that.
Firstly, it’s important to consider the story of EE. For those that don’t pay much attention to the telecommunications scene, the emergence of the British mobile network was remarkable. Over the course of a few months, countless high street locations became EE stores, often replacing other mobile providers overnight. Advertising took over the airwaves and if you happened to be on a Orange or T-Mobile contract, your phone began to list EE as the network. Indeed, those two companies had merged together, and the fact that deal was allowed is still somewhat remarkable.
Orange and T-Mobile, at the time of their merger discussions in 2009, were the two biggest mobile network in the United Kingdom, with a total combined user base of around 25 million British citizens on their books. They were also the two most direct competitors, focusing on price rather than exclusive phones like O2 or 4G like Three. As such, the fact that the regulatory body Ofcom and the European Commission saw fit to wave the deal through, and yet they did on the 1st of March 2010.
Before too long, both the Orange and T-Mobile brands were dissolved into the new EE brand and today, the company appears as a solid whole, though it’s still owned equally by Deutsche Telekom and Orange. The company boasts over 28 million subscribers and retains the title of the biggest network in the UK.
BT, meanwhile, remain a titan of British telecommunications services. Offering TV, broadband, home phone and business connections, they even have the task of connections and maintenance on the UK’s broadband infrastructure through their Openreach branch. The company have also been out of the mobile game since it sold O2 to Telefónica in 2007, which is just about the time when modern smartphones came into the market and taught us all that we need huge data packages in order to get through the day.
As such, this deal is an admittance on the part of BT that mobile communications networks are fast becoming the most important networks of all, and that if they didn’t get into the game soon, they could find themselves paying over the odds to partner up with a mobile network in the future. All in all, the deal will cost north of £12.5 billion.
Here’s what BT boss Gavin Patterson said about the deal: “This is a major milestone for BT as it will allow us to accelerate our mobility plans and increase our investment in them. The UK’s leading 4G network will now dovetail with the UK’s biggest fibre network, helping to create the leading converged communications provider in the UK. Consumers and businesses will benefit from new products and services as well as from increased investment and innovation. The deal provides an attractive opportunity for BT to generate considerable value for shareholders, with significant operating and capital investment efficiencies supported by our tried and tested cost transformation activities. The enlarged BT will offer significant opportunities for employees as we lead the creation of a world-class digital infrastructure for Britain.”
So why did the deal go through? Well, crucially for Ofcom and the regulatory bodies, this deal would not reduce the amount of mobile operators on the high street. Because BT-EE will still stay on the high street, they’re satisfied that levels of competition will remain and that consumers will get a good deal well into the future. A similar deal between O2 and Three is currently under investigation but could well fail, because it would reduce the number of operators on the street down to three.
What does all this mean for consumers? Well, for those on the 0844 381 6301 contact number for EE, not a lot for the time being. Customers likely won’t see much of a difference initially, but it will mean that down the line BT will begin to offer quad play deals, where you can get mobile, home phone, broadband and TV in one easy, cheap package. It’ll also potentially mean that BT could offer you a single broadband package that would work both at home and when you’re out and about, through their EE based 3G/4G network, public wi-fi towers and your own homes wi-fi network.