BT is in talks to buy either 02 or EE to create a quad play bundle of fixed, mobile, broadband and television services for British customers. It is all about offering converged communications, a concept that has been discussed for decades. The smartphone blurs the boundaries between fixed and mobile, voice and data. Consumers expect ubiquitous access to a network that can deliver a range of entertainment, information and communications services.
Back in 2001, BT decided to sell its mobile arm, formerly known as BT Cellnet. This has been since seen as a massive mistake. It is now in talks with Spanish operator Telefónica to buy it back, possibly in return for a minority stake in BT.
Keeping its options open, BT is also talks to acquire EE, the joint venture between German and French telecommunications companies Deutsche Telekom and Orange, formerly France Télécom.
BT has also been planning to launch its own hybrid mobile network. BT has been trying to play at pay-television too, to boost its broadband business. It has 1.05 million television customers out of 7.47 million broadband subscribers across 9.53 million active consumer lines.
O2 has a mobile network with 24.09 million mobile customers in the United Kingdom. Telefónica has nearly 250 million mobile customers worldwide. With 4.65 million pay-television customers worldwide, many of them in Hispanic America and Brazil, it is one of the top ten global groups in the informitv Multiscreen Index.
EE has 30.96 million mobile customers in the United Kingdom and around 800,000 fixed broadband subscribers. It recently launched EE TV, a multiscreen hybrid television service available only to its mobile customers that also take broadband. Its joint venture partners are both big players in telco television. Deutsche Telekom has 5.86 million television subscribers across its owned and partner operations in Europe, while Orange has 6.73 million. Between them they have 330 million mobile customers worldwide.
A move by BT could trigger further mergers or acquisitions in response, as operators attempt to bulk up to bundle converged communications services.
Vodafone has cash reserves to invest and could do a deal or form an alliance with Sky or Liberty Global, which owns Virgin Media. With 19.67 million mobile customers in the United Kingdom, 125.93 million across Europe and 438.47 million worldwide, it is a giant and a great British success story.
That leaves Three, owned by Hutchison Whampoa of Hong Kong, with 7.99 million active mobile customers in the United Kingdom and 22.59 million across Europe, looking at its own options.
TalkTalk, a competitor to BT and a partner in YouView, offers mobile, landline, broadband and television services. It has a total of 4.20 million broadband customers, of which 1.22 million take television.
The ultimate aim for operators is to be able to offer a package of communications services that can be bundled on a single bill, which is arguably more convenient for consumers but makes them less likely to change service providers.
Television and video services are an important part of the mix, as is the ability to deliver high speed broadband and video to mobile screens.
While BT has been trying to impress with its investment in Sport to promote its television offering and bolster its broadband business, the lack of a mobile service has been a massive omission it now needs to address.