BT agrees to $19B takeover of EE, paving way for close DT relationship

The negotiations are over: pending regulatory approval, BT will get back into the U.K.’s mobile scene in a big way by buying EE from Deutsche Telekom and Orange for £12.5 billion ($19 billion).

This means BT will be able to sell fully-converged bundles of fixed and mobile connectivity, telephony and pay TV services. It will also leave Germany’s Deutsche Telekom as BT’s biggest individual shareholder, and DT’s chief is already talking about the big European national telecoms giants working together more closely in the future.

“The UK’s leading 4G network will now dovetail with the U.K.’s biggest fiber network, helping to create the leading converged communications provider in the U.K.,” BT CEO Gavin Patterson said in a statement. “Consumers and businesses will benefit from new products and services as well as from increased investment and innovation.”

The companies began exclusive talks in December last year after BT said it was interested in buying either EE or O2. After BT and EE went exclusive, Three UK owner Hutchison Whampoa said it was in talks to buy Telefónica’s O2.

If both those deals go through, the U.K. will be left with three network-owning mobile operators, rather than four (the other one is Vodafone). Regulators will need to take this into account, along with the various chunks of spectrum that the companies own — despite only explicitly talking about business services at the time, BT bought 4G spectrum in 2013’s big auction.

It remains to be seen whether Europe’s competition regulators will take an interest, or whether it will be down to the UK Competition and Markets Authority.

EE is the U.K.’s largest mobile carrier, comprising as it does two former carriers, T-Mobile UK and Orange. It has 24.5 million direct mobile customers, 834,000 fixed broadband customers and a bunch more people who use EE mobile services resold under different virtual operator brands. In total, it services 31 million people, or roughly half the country.

The deal will be a cash-share combination, leaving Deutsche Telekom with a 12 percent stake in BT and one non-executive board member, and France’s Orange with a four percent stake.

“The transaction is much more than just the creation of the leading integrated fixed and mobile network operator in Europe’s second largest economy,” DT CEO Tim Höttges said in the statement. “We will be the largest individual shareholder in BT and are laying the foundations for our two companies to be able to work together in the future.”

AT&T to buy Nextel Mexico, continuing continental expansion

AT&T’s plans to tackle the Mexico market aren’t just limited to buying a single mobile operator Iusacell. It announced Monday it is buying Iusacell’s competitor Nextel Mexico for $1.875 billion from NII Holdings and will merge its operations into its growing pan-American network.

[company]AT&T[/company] closed its $2.5B deal for Iusacell earlier this month, making it the third largest mobile carrier in Mexico. Adding Nextel’s 3 million subscribers will give AT&T about 12.2 million customers in Mexico, but it will remain a distant third place to Mexican giant [company]América Móvil[/company].

Nextel Mexico is one of the many companies to carry the Nextel brand throughout North and South America. The most famous version Nextel Communications was acquired by Sprint a decade ago, and its brand was only recently retired. But several other Nextel’s continued operating in different countries under the [company]NII Holdings[/company] umbrella. NII filed for bankruptcy last year, so the AT&T offer has to go through the bankruptcy court. That means it could trigger a potential auction for Nextel Mexico’s assets.

Like the other Nextels, Nextel Mexico runs iDEN Networks, which were once celebrated for their walkie-talkie-like push-to-talk capabilities but fell out of use during the mobile data revolution. Nextel Mexico, however, has since launched a 3G network based on HSPA technology that lines up with AT&T’s technology. It’s also launched LTE in three major cities: Mexico City, Guadalajara and Monterrey.

UK authorities drop HP Autonomy fraud probe

The U.K.’s Serious Fraud Office has dropped its investigation into Hewlett-Packard’s allegations of fraud by the management of British big data firm Autonomy, which HP bought in 2011.

In a statement Monday, the SFO said there was “insufficient evidence for a realistic prospect of conviction,” and handed jurisdiction over the case to its American counterparts. There was little detail in the SFO’s statement, as it does not want to undermine the investigations that are still being carried out by the U.S. Securities and Exchange Commission (SEC) and the Federal Bureau of Investigation (FBI).

HP alleged that Autonomy misrepresented its financials ahead of HP’s disastrous $11 billion acquisition, which led to a $5 billion write-down and contributed to the defenestration of HP CEO Leo Apotheker. Autonomy’s former management, led by erstwhile CEO Mike Lynch, strenuously deny the allegations (and set up a website to put across their version of events.)

“As the SFO made clear, the U.S. authorities are continuing their investigation and we continue to cooperate with that investigation,” HP said in a statement. “HP remains committed to holding the architects of the Autonomy fraud accountable.”

HP’s shareholders also sued the company for not performing due diligence on the acquisition and, while those two parties agreed to settle in mid-2014, the courts have repeatedly blocked this settlement for giving HP too much protection from further suits.

This article was updated on January 20th to include HP’s statement.

Europe probes Orange-Jazztel merger over competition concerns

The European Commission has launched an investigation into Orange’s proposed takeover of Spain’s Jazztel. France’s Orange already has a Spanish subsidiary, whose connectivity Jazztel resells as a mobile virtual network operator. Jazztel, founded by Fon boss Martin Varsavsky 16 years ago, is more of a fixed-line player, while Orange has both mobile and fixed networks in Spain. The Commission said in a statement that it is worried about the fact that the merger would result in just three nationwide fixed-line communications providers in Spain (the others are Telefónica and Vodafone) and, by reducing competition, allow the ISPs to increase their prices. Orange has proposed commitments to keep things fair, but the Commission doesn’t think they go far enough.

Three UK owner also considering EE or O2 buy, report claims

The one-time U.K. monopoly carrier BT may be sniffing around O2 and EE as it considers how best to get back into the mobile carrier game, but it seems it’s not the only one. According to a Reuters report, Hong Kong’s Hutchison Whampoa is also considering a bid for one of those companies. Hutch already owns Three, the smallest U.K. mobile network operator, so this would reduce the number of network-owning cellular players in the country down to three (the other being Vodafone). Three and EE already have a network-sharing deal that involves a joint venture called MBNL, so integration would be easier on that front. EE is jointly owned by Germany’s Deutsche Telekom and France’s Orange, and O2 by Spain’s Telefonica.

Sports report: Conflict ahead

As sports viewing increasingly goes over-the-top and mobile, taking the traditional broadcast audience with it, big-ticket, broadcast-only rights deals are going to grow increasingly problematic for the broadcasters.

Telefónica to phase out 1,600 German jobs in wake of E-Plus takeover

Telefónica will cut 1,600 jobs in Germany following the merger of O2 Deutschland with E-Plus, to get rid of duplicate roles. The jobs will be phased out by 2018, the firm said Friday, noting that positions would go from both O2 and E-Plus. It also stressed that E-Plus’s Düsseldorf office would retain an important role in the combined operation, alongside Telefónica Deutschland’s Munich headquarters and Hamburg office. Telefónica completed its purchase of E-Plus from Dutch telecoms group KPN at the beginning of October following European Commission approval in late August, in the process becoming Germany’s biggest mobile operator.