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Demise of Orange Wednesdays to pave way for sale to BT?
Monday 15 December 2014 10:36:25 by Andrew Ferguson

Orange Wednesdays will soon be a memory, as EE is to drop the 2 for 1 discount on cinema tickets in late February 2015. This long running offer is vanishing because apparently our viewing habits have changed, though hard to tell from the box office receipts of the big films. Two years ago EE/Orange previously upset long term customers by ending its free fixed line broadband for mobile customers.

The stalking behaviour of BT in the mobile market may be most likely reason, since clearing out complex legacy deals ahead of a sell-off could smooth out negotiations. CityAM is suggesting that we will very soon find out the result of the BT mobile game.

BT if it is in the market to acquire a mobile operator valued in the £9bn to £11bn region is treading on thin ice, since with the numerous BDUK projects it is receiving gap funding of around £1bn to improve superfast broadband availability beyond the two thirds of the country that shareholders were comfortable financing on their own. If somehow BT was able to appear with a few billion in used notes to pay for a mobile operator a reduction in the level of gap funding but a continued commitment to hit the various broadband contract targets may be handed down by the Government. This might be avoided if the mobile purchase was not funded by cash but debt, this still raises serious questions over why was BT not able to finance more fibre based broadband roll-out via debt.


Posted by TheEulerID over 2 years ago
I'm not sure this is the best bit of financial journalism I've read. Firstly the stories on the prospective O2 takeover where that it was to be an equity, not cash purchase.

Secondly, commercial investments have to pay for themselves. The availability of cash does not, in itself, make any particular venture viable. It's that which gap funding deals with, not an issue of liquidity.
Posted by TheEulerID over 2 years ago
Here's the Telegraph story on this subject. At the end it states BT are expected to use equity, although some major shareholders are willing to subscribe to a rights issue, presumably if an element of cash is required. Note this is potential cash available only for this venture, and is clearly conditional on that.
Posted by themanstan over 2 years ago
I can't see how economically taking on more debt to improve a network would change the viability of areas?

As economic viability would relate to return on investment, an increase in debt to fund that would simply turn into more debt.
Posted by TheEulerID over 2 years ago

Exactly. Of course it's perfectly possible to claim that BT have got their sums wrong, or maybe that they are using BDUK to enable some areas they would have eventually done commercially. But you can hardly blame a company for making the best of it when state money is available. It's up to the government to make sure it gets value for money.
Posted by WWWombat over 2 years ago
I agree with the other financial-oriented comments. The article makes the same mistake that most consumers do when complaining that BT can afford sports rights, so why can't they deploy more fibre?

But looking forward, it would give the opportunity to include 4G into the mix for coverage solution on both basic & SF broadband in the BDUK contracts.

Likewise the ability to use dual-WAN routers, combining 4G and fixed SFBB, like DT in Germany.
Posted by Dixinormous over 2 years ago
Game over.
Posted by Dixinormous over 2 years ago
BT has agreed to buy EE from its owners, Deutsche Telekom and Orange, for £12bn.
It is understood that the deal, paid for with a combination of cash and BT stock, will be confimed this evening.
Posted by WWWombat over 2 years ago
The beeb is only announcing an exclusivity period of several weeks for negotiations....
Posted by killsta over 2 years ago
This article shows a massive misunderstanding of large scale acquisitions - it's not just a simple case of BT happening to have £12bn available to spend on EE that they could have used elsewhere.
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