BT in talks to buy O2 from Telefonica

BT is in talks to buy O2 from Spanish firm Telefonica. Picture: PA

BT is in talks to buy O2 from Spanish firm Telefonica. Picture: PA

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TELECOMS giant BT has held ‘highly preliminary’ talks about buying back the O2 mobile phone network.

The firm said it has received ‘expressions of interest’ from shareholders in two network operators, one of which is O2, about a possible deal in which it would acquire their UK mobile business.

The other network operator is believed to be EE.

O2, which is owned by Telefonica, was spun off from BT in 2002, before being acquired by the Spanish firm in 2005.

Telefonica has insisted that O2 remains key to its business but has not ruled out asset sales in order to meet a target to reduce the firm’s debt to below £34.5 billion by the end of the year.

Spanish website El Confidencial reported that ‘no final deal’ had been reached, adding: “According to various sources, the talks between Telefonica and British Telecom are advanced.”

The website reported that Telefonica could sell O2 in return for a 20 per cent stake in BT, as part of a ‘strategic alliance’ to strengthen the pair.

A Telefonica executive did not rule out selling O2 at an industry conference last week, saying the firm would have to ‘evaluate its options’ if more of the market moved to bundling fixed and mobile telecoms services.

A spokesman for BT said: “All discussions are at a highly preliminary stage and there can be no certainty that any transaction will occur.”

In July, the firm launched a new service with the intention of delivering fixed line and mobile calls to the same handset, taking a step back into the mobile phone market.

This latest move comes as BT fights a TV football war with Sky, as it tries to attract broadband customers with free Premier League matches.

It has also purchased the rights to Champions League games.

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