Orange and Deutsche Telekom in Talks to Sell their Joint Venture to BT
The European telecommunications giants Deutsche Telekom of Germany and France’s Orange have confirmed that they were in initial-stage discussions to sell EE, their joint venture to BT, the British multinational telecommunications services company.
This deal came after BT announced that it is in talks with investors of two of the country’s cellphone carriers, including O2, which the Spanish company Telefónica owns by about a potential offer of takeover.
Deutsche Telekom and Orange combined their British cellphone businesses in 2010, to form EE. Botrh the companies announced that the discussions with BT were introductory and they added that it’s too early to state whether any transaction may occur.
Shares in BT, Deutsche Telekom and Orange all rose approximately 1 percent in Europe in early morning trading on Wednesday.
BT is taking steps to expand its mobile offerings as major carriers such as Vodafone are branching out into television and broadband services.
The tough competition between European cable and carriers providers has set off a new round of consolidation in the industry, as large companies, many of which are former state telecom monopolies, have scooped up smaller rivals.
For many telecom companies of the region the aim is to offer so-called bundled services that provide television, cellphone, cable and land-line service to customers on long-term contracts.
Telecom providers are jockeying for position ahead of expected changes in Europe’s tough antitrust laws that may allow greater consolidation as local lawmakers try to jump-start investment in broadband and mobile networks, which are currently behind those in countries in Asia and North America.
BT currently offers customers deals through local partnerships with existing carriers. These efforts come in 13 years after the company spun off its British mobile phone unit in an IPO in 2001.
The business, known as BT Cellnet, was subsequently acquired by Telefónica for $28 billion in 2005.