BT has confirmed, after much speculation, that it is talks to buy EE which is the UK's biggest mobile network. See: UK's best mobile network 2014.
The telecoms giant is now negotiating with Deutsche Telekom and Orange with the aim of acquiring EE and its 24.5 million customers for a price of £12.5bn. The firms will look to come to an agreement over the coming weeks on the deal.
BT said in a statement: "The proposed acquisition would enable BT to accelerate its existing mobility strategy whereby customers will benefit from innovative, seamless services that combine the power of fibre broadband, Wi-Fi and 4G. BT would own the UK's most advanced 4G network, giving it greater control in terms of future investment and product innovation."
If the deal goes through, BT will pay in a combination of cash and shares with Deutsche Telekom getting a 12 percent stake in BT with the opportunity to appoint one member of the BT Board of Directors. Orange would be given a four percent stake.
What does it mean for EE customers?
The deal hasn't gone through yet but should the acquisition be made, there will inevitably be changes for customers.
TV and broadband
EE customers are likely to experience more change as it's probably that BT will put an end to EE broadband and EE TV services since they are currently rivals of its own products – namely Infinity and YouView.
BT said it "expects to generate revenue synergies through selling fixed-line services to those EE customers who do not currently take a service from BT." EE's broadband service uses BT's network so the transition should be smooth.
The move would mean BT can compete with Virgin Media as a 'quad-play' provider by offering broadband, mobile, landline and TV in one bundle. Existing BT and EE customers are likely to be offered discounts and deals to take all four.
BT hasn't announced what it plans to do on the mobile side of things and it will be a difficult decision whether to ditch the EE brand which the company has spent a lot of money building, including the tie-in with Kevin Bacon. We wouldn't be surprised to see BT Mobile becoming the new name eventually, though.
It's also unclear what will happen to T-Mobile and Orange customers who haven't moved to EE's 4G network. BT could let them simply remain unchanged or force them to merge into the main network. See also: Best SIM-only deals.