BT picks EE as MVNO partner, shuns O2 and Vodafone

BT signed an agreement to use the mobile network of UK operator EE, in a move that could see the UK incumbent return to the consumer mobile market as soon as next year.

In a statement, BT said EE will provide MVNO services to BT's customers and employees. The operator said earlier this year it was seeking a new MVNO partner, although it already had a wholesale access agreement with Vodafone.

Telefónica's O2 UK had been cited as the most likely contender because of its previous relationship with BT and the fact that it recently picked BT for backhaul services, but EE's head start with LTE may have tipped the balance.

BT last competed in the UK mobile 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." Telefónica acquired O2 in 2005 in a £17.7 billion (€20.8 billion)  deal.

The deal to use the 3G and LTE network of EE is expected to enable BT to return to the mobile market with a vengeance after initially offering the services to its employees and business customers, and the Guardian noted that it could start to offer LTE connections to consumers from next year. That, in turn, would enable the operator to offer "quad-play" bundles of mobile, fixed broadband, TV and fixed voice services to consumers across the UK, giving it a further advantage over BSkyB and allowing it to become only the second quad-play provider in the UK after Virgin Mobile. BT's growing content portfolio after recently buying Premier League football rights for its sports channels makes this a potentially potent mix of services.

"We are excited about this partnership with EE as it will give us lots of options both in the business and consumer markets," BT told the Guardian. "BT already operates the UK's largest Wi-Fi network with more than [5 million] hotspots, and we are keen to build on that platform. Broadband speeds are improving all the time with fibre and 4G and we want our customers to enjoy the fastest speeds possible, whether they are in the home, office or out and about."

BT is now able to exploit a mix of wireless assets including indoor Wi-Fi routers it has suggested could be used for indoor coverage and a slice of 2.6 GHz LTE spectrum it acquired during the UK LTE spectrum auctions. EE's network would be used for the wider range signals, and a sharing arrangement between the two operators could also be possible as they both own spectrum in the same band.

According to the Guardian, former BT CEO Ian Livingston told investors in may the operator plans to build an "inside-out" network, using Wi-Fi for indoor coverage and traditional mobile masts for outdoors.

"People tend to use their device for more high intensity downloads when they're on the pause, when they're indoors," Livingston said at the time, reported the Guardian. "And we think that presents a great opportunity to combine Wi-Fi, to combine 4G and give basically the best connection when you're sitting down, when you're in your home, when you're in your business, when you're in a train station, when you're in the airport."

For more:
- see this Guardian article
- see this FT article (sub. req.)

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