BT and EE: A very British affair

Back in August 2013, Olaf Swantee was spending a great deal of his time fending off speculation about EE's future, with an acquisition and an initial public offering (IPO) both on the table as potential future options for the UK mobile operator.

The mobile operator's CEO appeared to like the idea of an IPO for one particular reason: it would make EE appear more "British".

"The advantage of an IPO is we would be perceived as more British than we are today," Swantee told Bloomberg at the time. "Being on the stock exchange would make us more UK-centric. It would give us more financial capacity."

Indeed, with a Dutch CEO and French and German parents, EE today has a more European than British flavour. That could all change if BT acquires the UK operator: the former UK incumbent entered into exclusive negotiations with EE shareholders Orange and Deutsche Telekom on Monday.

Such a merger would create a new British fixed and mobile heavyweight with a history stretching back to 1846, when the Electric Telegraph Company was set up as the first commercial telegraph service. In 1878, the National Telephone Company (NTC) provided some of the first telephone services in the UK, soon competing with the General Post Office (GPO). The name "British Telecom" first emerged in 1977, with BT adopted as the trading name in 1991.

BT last competed in the UK mobile consumer market in 2002, when its BT Wireless unit sold services under the BT Cellnet brand. BT Wireless was demerged in 2002 and renamed as "mmO2," later changing to simply "O2" and acquired by Telefónica in 2005.

Now that BT wants to get back into mobile, it has chosen an operator with a very different history: EE can trace its roots back to 1990 and Microtel Communications, which became Orange four years later. In 1993, Mercury Communications launched One2One, which eventually became T-Mobile UK.

The fact that EE now has the most advanced 4G network in the UK, as highlighted by BT in its statement, is no doubt a strong argument in favour of EE as opposed to O2 UK, despite the previous close links between BT and O2. The question now is, what does the future look like for O2 UK? The company looks increasingly isolated as a mobile-only player.

The other question is: what might a new "BT" be called if the deal to buy EE goes ahead? BTEE? BEET? All should be revealed in the coming weeks.--Anne

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