UK network BT mulls mobile return to fuel quad-play competition

Fixed netowrk operator BT is considering buying a UK mobile network, and is in talks with the owners of O2 and EE

U.K. consumers are likely to benefit from cheaper communications bundles as British Telecom plots its return to the mobile market and Vodafone plans to add TV and fixed broadband services

The U.K. market is one of the worlds competitive markets for mobile services, which has been very good for consumers. But when it comes to aggressively priced quadruple-play bundles of mobile, fixed broadband, telephony and TV it trails many other European countries, according to Kester Mann, principal analyst at CCS Insight.

"Countries like France and Spain are certainly much more developed," he said.

But that looks like it will change next year, and consumers will once again be the winners.

BT seems intent on making a comeback in the mobile telephony and broadband market, 10 years after selling its mobile unit to Telefónica. The company is considering either buying back O2 from the Spanish operator, or acquiring competitor EE, formed from the merger of the U.K. networks of Orange and T-Mobile.

On Wednesday, EE's owners Deutsche Telekom and Orange confirmed they are "having highly preliminary exploratory discussions" with BT. Talks between Telefónica and BT were acknowledged on Monday.

BT has already entered the U.K. TV market with much fanfare, and the addition of mobile would allow it to put together a variety of bundles.

Earlier this month Vodafone announced plans to launch home broadband and TV services next spring. At the time, the operator's CEO, Vittorio Colao, told the Financial Times that if BT comes more into mobile then Vodafone will go more into consumer broadband.

Being any kind of network operator isn't quite as fun as it was a couple of years ago.

Mobile operators are seeing their traditional revenue streams come under pressure from Internet-based services such as WhatsApp and Skype. Fixed operators have lost some of their luster as users are getting rid of their fixed phones and at the same time cable and broadband TV operators are battling for viewers with newcomers such as Netflix and Amazon.com.

Many operators are convinced service bundles are the best weapon for fighting back. In France, cable operator Numericable has acquired mobile operator SFR. Vodafone, historically a mobile operator, has already acquired cable operators in Spain and Germany, and on Wednesday its deal to buy 72.7 percent of Hellas Online, a broadband and fixed-line telephony provider in Greece, was completed, and it is now looking to buy the remainder.

Send news tips and comments to mikael_ricknas@idg.com

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Mikael Ricknäs

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