BT bids to buy back O2

Deal could be worth £10bn, but BT claims it is interested in another mobile operator's business too

BT has confirmed that it is interested in acquiring Telefonica's UK mobile business, better-known as O2, and is also in preliminary talks with another UK mobile network operator to acquire its UK mobile business.

The telecoms giant reacted to growing speculation relating to a potential transaction involving O2 by confirming that discussions had indeed taken place.

The acquisition of O2 would be another statement of intent from BT to move back into the mobile arena, a remarkable turnaround since it had sold O2 to Spanish telecoms giant Telefonica in 2005 for £17.7bn.

Since selling O2, BT has dropped its focus on the mobile area, leaving the likes of Vodafone, EE and Three to duke it out with O2.

But in 2012, the company first suggested it would be interested in re-entering the fray. BT has since bought radio spectrum as part of the 4G auction in 2013, and is launching its own mobile network for consumers next year.

BT has signed a deal with EE to use its network and is planning to supplement this with its existing 5.4 million Wi-Fi hotspots. Whether this relationship with EE indicates that BT could be interested in acquiring the biggest UK mobile operator's business is not yet known.

"We continue to develop our own plans for providing enhanced mobile services to business and consumer customers, in line with our previous announcements," a BT spokesperson said.

"We remain confident on delivering on these plans and have also been exploring ways of accelerating them, including assessing the merits of an acquisition of a mobile network operator in the UK.

"We have received expressions of interest from shareholders in two UK mobile network operators, of which one is O2, about a possible transaction in which BT would acquire their UK mobile business," the spokesperson added.

The spokesperson stated that all discussions were at a highly preliminary stage and that there could be no certainty that any transaction would occur.

According to Spanish press reports, Telefonica could end up with a 20 per cent stake in BT in exchange for O2, valuing the deal at roughly £10bn.

BT said that it could not reveal any further information, but that an announcement would be made if and when appropriate.