Deutsche Telekom will get a 12pc stake in BT and the right to appoint one board member, while France’s Orange will get more cash and a 4pc stake in BT
BT has finalised a £12.5bn deal to buy EE, Britain’s largest mobile network, from Deutsche Telekom and Orange.
Talks over the tie-up have been going on since December but reports on Wednesday night suggested an agreement has been reached and an announcement could be made as soon as this morning.
Deutsche Telekom will get a 12pc stake in BT and the right to appoint one board member, while France’s Orange will get more cash and a 4pc stake in BT.
It will be the second boost for BT in as many days after Vodafone ditched a campaign for the biggest broadband operator to be broken up.
It is understood that Vodafone will now focus its formidable lobbying operation on what it sees as more readily achievable regulatory measures to help it compete in Britain’s rapidly shifting telecoms market.
The change comes as Vodafone prepares to enter the superfast broadband market from scratch.
Vodafone faces pressure from BT’s EE deal as well as from the planned £10.25bn acquisition of O2 by Hutchison Whampoa, the owner of Three. The merger of the two mobile operators would relegate Vodafone to last place in the mobile market.
Before the two blockbuster deals were announced Vodafone was among the loudest voices in the industry calling for BT to have its wings clipped. It intended to mount a concerted campaign this year to wrest the national telecoms infrastructure away from former state monopoly, which BT controls via its regulated Openreach division.
It has recently dropped calls for such radical intervention, however, three sources said. It is understood Vodafone will instead prioritise an Ofcom consultation over access to “dark fibre”, a currently unavailable form of wholesale access to the BT network. It would give rivals greater technical and service control over customer broadband lines.
Vodafone is also likely to seek a forced sale of mobile network spectrum by BT following the takeover of EE. The combined group would have by far the largest share of the airwaves.
But Vodafone’s decision to abandon a campaign for Openreach to be forcibly spun off will be welcomed by BT. The division is the BT cash cow, generating £1.5bn of its £2.5bn cash flow and funding its expansion into sports broadcasting.
A Vodafone spokesman said: “Whatever the regulatory approach it is crucially important that all providers must be able to compete effectively with a combined BT-EE.”
Vodafone is poised to launch its broadband offer to consumers in spring. It will offer only superfast broadband, connecting the Cable & Wireless fibre-optic backbone network it acquired three years ago to BT local exchanges.
Courtsey: The Telegraph