BT says it will raise 1 billion pounds through a placing of new shares to fund its 12.5 billion pounds ($19 billion) acquisition of mobile operator EE. As Hayley Platt reports BT's move into mobile comes as a steady recovery in Europe helped Vodafone stem the rate of sales decline in its third quarter.
It's already Britain's biggest fixed-line telecoms provider. Now BT is to add mobile to its portfolio of products after agreeing to buy EE from Deutsche Telekom and France's Orange. The deal, worth 12.5 billion pounds, will bring together BT's 10 million customers with EE's 24.5 million. It will be party financed by a £1 billion pound share issue and debt. The news received a warm welcome from investors, boosting shares by more than 4.5 percent - a 14 year high. David Papier is from ETX Capital. SOUNDBITE: David Papier, ETX Capital, saying (English): "I think this is a major milestone for BT as it allows them to accelerate mobility plans and increased investment in that area and they seem to have done this rather than building up from scratch, they've gone and bought one of the biggest providers in the UK and they're going to build upon." BT has been wanting to return to the mobile market since selling off O2 in 2001. The purchase of EE will help realise its plans. Deutsche will retain a 12 percent stake in BT - Orange just 4, creating a leading converged communications provider in the UK. But rivals have already called on regulators to intervene. SOUNDBITE: David Papier, ETX Capital, saying (English): "The question on everyone's lips is, is this going to create a cartel. BT has monopolised the landline for a very long time now is it going to go into the monopolisation of the mobile phone market as well. Yes there are a lot of providers out there but with this merger it's going to create an absolute giant." The move comes as the world's second biggest mobile phone operator, Vodafone reports better-than-expected third quarter sales. A steady recovery in Europe helped stem falls. Although the group says the European market remains tough. Growth is slowing in its emerging markets too. So far it's rolled-out 4G across 18 countries. And has plans to beef up its superfast fixed-line broadband networks to compete with the likes of the soon to be mightier BT.