BT is severing its ties with Vodafone and moving to EE’s network to fulfill its mobile needs in a deal that opens up the possibility of the telecoms giant once again offering mobile services to consumers.
Although nothing has been signed, BT disclosed that it has chosen to proceed with EE on an exclusive basis over O2 or Vodafone. BT intends to finalise a contract with the firm to provide mobile services that will be used by its corporate customers and its 88,000-strong workforce.
According to BT, the deal is expected to be finalised at the start of 2014. Over time, all its corporate customers will be migrated onto the EE network, a process that could last for about two years.
The deal will cover the use of both 3G and 4G services, BT confirmed. It refused to be drawn on whether it planned to offer these services to consumers in future, instead stating that it, “evaluates new service opportunities in new markets”.
Given that BT also now owns spectrum in the 2.6GHz range which it secured in the 4G auctions earlier this year, it would make sense if the firm eventually moved to provide mobile services of its own to consumers.
However, BT exited the mobile market back in 2002, when it spun out its BT Cellnet network into a separate company that became O2.
The deal is also a major coup for EE, as it underlines the confidence that a major organisation like BT is placing in its network. It will also add a nice boost to its cash balances as it faces increased charges from government of around £80m for the use of spectrum holdings in the near future.
However, it will be a blow for Vodafone, which had previously operated these services for BT. It was reported to have pulled out of the running earlier this year, leaving EE to battle it out with O2.
EE now has over 20 mobile virtual network operator contracts, including one recently announced with Asda, which it also won at the expense of Vodafone. It is also expected that its deal with Virgin Media will be renewed before the end of the year.
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