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BT and Telefonica enter O2 deal discussions

Article By: ,  Financial Analyst
November 25, 2014 10:26 AM

Telecommunication firms BT and Telefonica have held "highly preliminary" talks over a potential deal for the O2 mobile network.

O2 was purchased by the Spanish telecoms giant in 2005 after BT decided to spin out the previously named BT Cellnet. At the time Telefonica paid the British firm £17.7 billion to take over O2 however, Deutsche Bank has estimated the current value of the mobile network to be around £9 billion, UBS values it slightly higher at £9.6 billion.

BT said in a statement that the current discussions are still very much in their infancy and there was "no certainty that any transaction" would take place. The group add that it had received "expressions of interest" to take over two network operators, one of them is O2. A move would see BT take over the company's UK mobile business.

While there has been no confirmation, the other mobile network is believed to be EE, which is owned by Orange and Deutsche Telekom. With talks in a preliminary stage, it is not clear what BT's next step will be and whether it wants to invest in a mobile network it sold only a matter of years ago.

BT said: "We continue to develop our own plans for providing enhanced mobile services to business and consumer customers, in line with our previous announcements.

“We remain confident of delivering on these plans and have also been exploring ways of accelerating them, including assessing the merits of an acquisition of a mobile network operator in the UK."

Alongside BT's new efforts to re-establish itself within the mobile sector, the company has been investing heavily in television. The company BT Sport channel has been established power Sky Sports for the rights to football coverage in the UK.

BT Sport scored a major coup last year when it secured the right to screen all Champions League and Europa League matches from 2015 after paying £897 million.

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