BT have confirm the purchase of mobile phone giant EE for £12.5 billion. EE are the market leaders when it comes to 4G (the fastest mobile bandwidth) and 24.5 million customers which is 33.8% of the UK mobile phone market.
Back in 2002, BT sold their own mobile phone network, BT Cellnet (now O2) which was then acquired by Spain’s Telefonica for £17.5 billion.
How will this affect your house hold?
· BT is likely to offer ‘bundled’ services which include mobile, home phone, broadband and TV services. This model, known as quad-play, is popular in other European countries, such as Spain. It also means you only have to deal with one provider. EE already offers a bundled service.
· Cheaper prices: If you take on a bundle deal, you should be in for a cheaper deal in return. But be aware that bundling different services together makes it harder for you to keep track of exactly how much you pay for each one.
· Less freedom to switch: Mobile phone and broadband companies like bundled packages because it encourages you to stay. On the other hand, if you become unhappy with one service, it becomes harder to switch.
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BT now has to take on EE’s £2bn debts and borrow a further £3bn from the bond markets. The rest of the price will paid with shares, with Deutsche Telekom taking a 12pc stake and a seat on the BT board. Orange, which has a more pressing need for cash to pay for its own takeover of the Spanish telecoms operator Jazztel, will take only 4pc of BT equity.