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O2 a better match for BT than EE say analysts

Analysts have has their say over BT’s forthcoming acquisition of  a major mobile network, and the verdict is that O2 would be the best match.

Earlier this week it emerged that first O2 and then EE were in preliminary talks with BT over an acquisition by the UK telecoms giant.

The Wall Street Journal has been polling industry analysts on which company would make the better match for BT, and the verdict seems to be in O2’s favour.

Though EE is valued at slightly more than O2 ($16 billion versus $14 billion), and has three million more subscribers and 130 more shops, the latter will hold more appeal to BT, it’s believed.

For one thing, BT used to own O2, which means there’s a common history there. “BT is likely to feel that O2 is the more natural asset to own, having owned it previously,” said Steve Clayton, an analyst at Hargreaves Lansdown.

It’s also pointed out that the two companies have a longstanding partnership for leasing fixed-line and mobile infrastructure. According to Imran Choudhary of Kantar Worldpanel, “O2 would be a good fit as nearly a third of its customers already source their home broadband from BT.”

Meanwhile, EE’s operation is said to be a lot more complex. It is, after all, an amalgamation of two established mobile networks. O2 is run in a far more straight-forward way.

Of course, not everyone is so dismissive of the EE option. It’s pointed out that EE has 760,000 broadband customers using BT’s infrastructure, while BT has signed a deal to use EE’s 4G network next year.

Citi analyst Simon Weeden also points out that EE’s broad network spectrum might be more appealing to BT than O2’s.

General consensus seems to be that O2 would be the better partner than EE, but that either acquisition would be good for BT.

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