The BT saga rolls on. Now it appears to be confirmed that they will takeover EE, the biggest mobile network in the UK. This would create a British giant by combining the largest landline network with the largest mobile network – possibly under one brand, but certainly working together within the same group.
The Daily Telegraph has some insight into the financing of the deal, which they suggest will require a rights issue – and debt. Regulatory issues may delay the deal – especially regarding the potential creation of a telecoms monopoly. Analysts believe that because of these complications it is unlikely that any takeover could be completed in less than a year.
This means that if the deal does go ahead, it might be well into 2016 before any new and combined products could be launched.
The potential benefit of bundling services together is only mentioned in passing in the Telegraph article. A Moody’s analyst suggests that the combined company would be the largest integrated telecoms player in the UK, able to offer TV, landline, mobile, and Internet all in one package – the so-called quad-play.
But, as I wrote last August on this blog, the development of quad-play services in the UK has been patchy to say the least. British customers have generally preferred to pick out individual services with Virgin being the only big operator marketing this kind of bundle at present.
If the BT-EE deal does go ahead and the company starts planning new services that will launch in about 18 months then they need to think carefully about what the customers really want. A lot can happen in that time and I believe the wind is already blowing in the direction of telcos focusing on the content they can provide rather than competing on network access or price.
What do you think about the proposed BT deal? Leave a comment here or tweet me on @simondillsworth.
Photo by GanMed64 licensed under Creative Commons