Report: BT could reunite with O2 UK in wholesale LTE deal

BT has opened the bidding for a new mobile partner in a move that could see the UK's former telecoms monopoly back together with its former mobile unit, O2 UK, according to a report in the Financial Times.

According to the report, which cited unnamed sources, BT is planning a renewed onslaught on the mobile services market by making use of LTE spectrum it acquired for almost £200 million (€237 million) during the recent UK auction. The report said BT is now exploring options to get a better deal for wholesale mobile services. BT spun off O2 in 2001 and it was acquired by Spain's Telefónica in 2005.

"We can confirm we're looking for a fresh partnership with a mobile operator," BT said in a statement to the FT. We won some excellent 4G spectrum just recently so it makes sense for us to explore the new opportunities that 4G presents. We have a strong position in the Wi-Fi market and we are looking to build on that."

Vodafone, which currently has a wholesale agreement with BT for the provision of mobile services, is believed to be rebidding for the contract alongside O2 and EE, the FT reported. Vodafone declined to comment, according to Bloomberg.

At the time of the auction, BT perplexed industry observers by buying much more LTE spectrum than required to cover its stated aims of boosting Wi-Fi coverage across cities and local areas.

"Now we've won 4G spectrum, we have got a strong hand to get a better deal," BT spokesman Ross Cook told Bloomberg. "Some of the mobile operators might want to use it."

It is also worth noting that in 2011, EE and BT carried out the first live trial of LTE mobile broadband in the UK in Cornwall. The companies collaborated on providing mobile broadband to about 200 customers living in St. Newlyn East and the surrounding area of South Newquay.

In the UK BT provides triple-play plans of fixed broadband, fixed voice and television services, and offers limited mobile services via BT Broadband Anywhere smartphone plans, which can be added as an optional extra to two existing broadband plans. It no longer sells a prepaid mobile broadband service offered under BT Mobile Broadband Dongle.

"[BT is] rolling out fibre at breakneck speed and it's obvious that customers want decent speeds when they're out and about as well as at home," BT added, according to the FT.

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

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UK LTE spectrum auction draws £2.34B, below government expectations
Analyst: Vodafone, O2 have most to lose in UK LTE spectrum auction
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