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BT buys EE for £12.5 billion.

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.

 

Further information can be found on the below links.

 

http://www.mirror.co.uk/money/4-ways-bt-takeover-ee-4819409

 

http://www.bbc.co.uk/news/business-30487285

 

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.