BT-EE deal 'harbinger of wider shake-up' - IDC

BT agrees deal to buy EE for £12.5bn

BT finalised a deal today to buy EE for £12.5bn, in a move that IDC says will kick off a radical reshaping of the broadband, mobile and TV markets in the UK.

As expected, the deal went through today between BT and EE's parent companies Deutsche Telekom and Orange. Following the move, Deutsche Telekom will take a 12 per cent stake in BT, and Orange four per cent, along with approximately £3.4bn in cash.

But IDC believes the deal, which is still subject to regulatory approval, will have a much wider significance and form part of a larger trend.

John Delaney, associate vice president of mobility at IDC, said: "Hutchison, the owner of mobile operator 3, has already announced its intention to bid to acquire Telefonica's mobile operator O2. Sky has announced its attention to start offering mobile services as an MVNO. Vodafone has announced its intention to make a major entry into the market for home broadband, and it may be considering acquisition of one of the UK's ISPs.

"Clearly, then, the BT/EE deal is the harbinger of a wider and more far-reaching shake-up of the UK markets for broadband, mobile and pay TV," he said.

"In the UK communications market, the pieces of the puzzle are being thrown up into the air, and it's not yet clear where they will all be when they are put back together."

The deal between BT and EE is still the subject of approval by regulators, but there is debate over whether they will be UK or European.