EE has a much more robust and technologically modern network - excellent 2G/3G coverage and currently leading in 4G coverage, and trialling things like LTE Advanced.
O2 meanwhile decided to invest the bare minimum and this has resulted in a network with pretty bad 3G coverage and questionable reliability, and BT would have to spend a lot of time and money to bring it up to scratch, whereas EE is ready to go
EE also holds more 4G spectrum than O2, IIRC, so EE is capable of more
To be honest O2's and EE's capex requirements for "network" investment over the next few years are similar (as they have been for the past few years) and both were financing them from existing cashflows so there's not much difference for BT.
The thing is, when people say "investing in the network" everyone just thinks of the radio network. But a huge chunk is actually IT generally and this is where EE have to spend vast sums as they have some huge IT transformation projects. O2 don't need this but they need to spend on the RAN. Net effect overall is similar capex requirements.
BT doesn't really own much of a mobile operation of its own so I can't see why that would be a problem, it's just the network changing ownership rather than a merger like T-Orange was
But there might be concerns about BT owning EE and Openreach (who owns the wired infrastructure) and may be forced to get rid of it for the deal to go through - there's a slight conflict of interest (BT may try to use 4G as an alternative to upgrading the wired network, which is what they have to do currently) and I'm sure the likes Vodafone won't be too happy
One of the biggest worries, I am told, is over what is known as "backhaul" services.
That's the vital bit of the telecoms infrastructure that links mobile transmission masts with the mobile operator's network.
To be honest O2's and EE's capex requirements for "network" investment over the next few years are similar (as they have been for the past few years) and both were financing them from existing cashflows so there's not much difference for BT.
But EE has a head start if you think of it like that. O2 would have to put in much more effort/money to catch up get to EE's position, let alone surpass it.
The thing is, when people say "investing in the network" everyone just thinks of the radio network. But a huge chunk is actually IT generally and this is where EE have to spend vast sums as they have some huge IT transformation projects. O2 don't need this but they need to spend on the RAN. Net effect overall is similar capex requirements.
Probably because the radio network is the public's interface with the company and the main thing people care about - no one cares if O2 has the best IT systems in the world, if they can still only get flaky GPRS
Presumably they will drop the name. BT Mobile surely?
I don't think they will, EE as a shell have spent an extraordinary amount of money on the branding. It has killed off T-Mobile and Orange to create this unified image. I think it will be a case of EE from BT (like it was Orange from EE), enabling BT to insert its branding but not kill off the existing brand.
The beautiful thing about EE is that its a brand unique to the UK, so there should be no negotiating for Brand/Image royalties. The company though owned by two parent companies is sold as one. It will slot rather well amongst BT shell companies like Openreach and Global Services, so in essence the brand can live on under a new owner.
BT has shown tendency in the past the companies they have bought retaining their original brand identity. Plusnet being a prime example. Whenever you see Openreach mentioned it usually isn't in the same line as BT retail, as it separate regulated business. They have a chinese wall so to speak put in place mandated by OFCOM.
One of the big issues here is the backhaul of which BT provides extensively to all UK networks, I think that will transfer to Openreach where BT will still own the network but it will be sandboxed within the Openreach business much in the same way phone lines and broadband are now.
Some people are bemoaning the prospect of BT owning EE, however I don't think they will want to jeopordise the exist business either. EE as a brand and a business is largely free of legacy complaints, its a new company which will slot easily within the BT Groups business. I think what will happen is further partnerships from Sky with another network, they will be watching keenly. I do expect them to put up a significant battle to slow down the merger while they get their house in order for a potential mobile offering.
Whilst it won't sail through, compared to the EE merger which went on for time, I should expect this one to be swift comparatively. All they will need to do is divest the spectrum and hive off the broadband, along with changing management of the backhaul to openreach and they will be good to go.
It makes sense for BT to buy EE. BT are at serious risk of losing ground as 4G takes off over the next number of years, now they're looking at purchasing and becoming the leading network in 4G coverage. So they will be the lead provider of 4G and Fibre broadband in the UK.
BT getting into quad play services kills off Virgin Media's unique selling point and will enable them to offer attractive competitive packages. Cross platform sales will be very attractive. EE has roughly 27m customers I think?
BT will acquire more broadband and landline customers which will be a big boost to their customer base. They will acquire hundreds of premises they can utilise or sell off. EE were looking to buy a lot of P4U properties and their customer base, will this still go ahead and be naturally inherited by BT?
I think Sky and VM will be very worried about this deal. I wouldn't be surprised to see Sky try and buy O2 in a knee jerk reaction. They've made plenty of them in the past to try and dampen rivals momentums etc.
.... In essence as it stands now Sky has the exclusive right to pretty much all films released upto 12 months after they have finished showing at the cinema.....
That is maybe harder to regulate, being a world thing. It would have likely suited film studios who have their own plans ahead I'm sure.
And Europe is more non English, so maybe they do not get controlled as much by the USA who produce the English speaking movies.
Probably because the radio network is the public's interface with the company and the main thing people care about - no one cares if O2 has the best IT systems in the world, if they can still only get flaky GPRS
Obviously EE's management do care which is why they are spending such vast sums. It's regarded as critical in improving their relatively poor customers service record. Net effect is three years down the line with both having spent similar amounts, O2 have 4G almost everywhere and EE have excellent customer care. Well that's the theory anyway.
It's possible of course that BT identified they could save something on EE's future capex plans with their own systems but obviously not on O2's RAN spend and this was part of their decision.
If Vodafone does acquire Liberty Global, then we can expect Sky to circle the corpses of the other operators in lieu of partnership or merger. Where BT and Vodafone go Sky will surely follow, I can't seem them being left out in the cold by choice.
That is maybe harder to regulate, being a world thing. It would have likely suited film studios who have their own plans ahead I'm sure.
And Europe is more non English, so maybe they do not get controlled as much by the USA who produce the English speaking movies.
Now that I don't know, if you were to watch HBO Go or Netflix in scandanavian countries the majority of the content is streamed in english with the option of subtitles. I think in western europe English is generally the accepted broadcasting language with regional compliments thrown in (unless you are in France in which anything other than French is sacrilege).
Language doesn't have much of an impact on the sale of rights, its generally down the to regulators involved. Sky has had it good for so long I really do expect their day to day business to change massively over the next 2 years. As cross selling picks up amongst mobile operators, it really is going to be left out in the cold.
What I find telling about Sky, when you call up to cancel you go through the usual hubub and give your notice. In my case it was cancelling everything broadband etc and moving across to BT, I receive that inevitable phone call asking why I am leaving. I explained that I wanted everything under one bill (I lie I didn't), anyway they couldn't come back with a decent offer for the broadband and phone line but offered me a rather sweet TV deal. When I asked them about the broadband and phone line I was met with stiff silence, I get the impression that paytv is Sky's only interest. I don't even think the broadband phone business earn them that much money compared to say BT or TalkTalk. I think in the next 12-18 months Sky is going to do some soul searching, trying to figure out what the company will look like in that time frame. I have no doubt they will enter the mobile market in a big way. However their traditional stranglehold on Sports and Film rights is under threat in a massive way. This is another company that will have to go through some restructuring to ensure it is fit and relevant in tomorrows world.
Sky, O2 and Three have the same problem (separately), what to do next. As the market heats up and I firmly believe it will, two of those companies will inevitably partner or merge.
Hardly anyone cared about 3 having the best data by a mile years ago.
Though I do suspect, maybe a bit like now, that people were locked into expensive phone plans. There is that quite weird ego thing that says, 'I own it so it has to be the best'.
:eek:
Does anyone think BT are ultimately looking to take over Sky's dominate TV position with their recent esculations?
Yes......BT and Sky will be pulling out the cheque books for the next round of premiership tv rights. BT has been growing its TV platform quite solidly, I have a funny suspicion when the auction is over the rights will be more or less evenly split (unless a third entrant comes in which really would set the cat amongst the pigeons).
The difference between the two of them is telling, BT has broadly speaking a 10 year plan to grow its business horizontally, in essence getting back into the mobile sector, increasing its TV service offering, keener pricing on broadband etc.
Sky on the other hand has its TV which clearly is the bread and butter of the company. Yet its broadband and phone line segment doesn't command the same amount of interest. BT and Virgin know that the more services a customer holds with you the less likely they are to leave, in effect you lock them in. Sky only has this with the fixed line business and even then it isn't pushed like Virgin and BT.
BT with this acquisition is opening up new sources of revenue for the company, in addition it will also broaden their portfolio of businesses ensuring a stable and sustained income. Sky/O2/Three will be looking on in envy at Vodafone and BT when all is said and done.
I really hope this acquisition really does upset the apple cart by pushing down prices. I suspect however we won't realise those benefits until around 18 months or so after the merger whoever with is completed.
Looks like my home phone will end up as BT again as its Orange/EE now, and I was going to upgrade my mobile on Orange/EE, but will see how this pans out first.
Well, people do not queue here to watch great foreign language movies at the cinema.
There isn't even one I can think of that hinted of sell-out, can you ?
If film rights were sold in the manner similar a cinema then you would have a point. However they aren't, they are sold by territory or each individual country to usually a buffet of Pay TV companies.
Film rights excluding box office related purchases are unique in the UK market it is dominated by one provider who do admittedly sell on those channels to any willing TV platform. The crunch isn't around whether those channels are resold its more around the rights themselves and whether its anti-competitive one wholesale provider having exclusive rights on virtually everything released at the cinema.
Sports rights are managed differentlty to films in that each broadcaster buys agreed exclusivity for the packages sold. When you look at other markets film rights are sold to a myriad of providers rather than to single one as in the UK.
Comments
I doubt it. BT keeps on putting up their annual prices. They are not into reductions.
To be honest O2's and EE's capex requirements for "network" investment over the next few years are similar (as they have been for the past few years) and both were financing them from existing cashflows so there's not much difference for BT.
The thing is, when people say "investing in the network" everyone just thinks of the radio network. But a huge chunk is actually IT generally and this is where EE have to spend vast sums as they have some huge IT transformation projects. O2 don't need this but they need to spend on the RAN. Net effect overall is similar capex requirements.
But EE has a head start if you think of it like that. O2 would have to put in much more effort/money to catch up get to EE's position, let alone surpass it.
Probably because the radio network is the public's interface with the company and the main thing people care about - no one cares if O2 has the best IT systems in the world, if they can still only get flaky GPRS
I don't think they will, EE as a shell have spent an extraordinary amount of money on the branding. It has killed off T-Mobile and Orange to create this unified image. I think it will be a case of EE from BT (like it was Orange from EE), enabling BT to insert its branding but not kill off the existing brand.
The beautiful thing about EE is that its a brand unique to the UK, so there should be no negotiating for Brand/Image royalties. The company though owned by two parent companies is sold as one. It will slot rather well amongst BT shell companies like Openreach and Global Services, so in essence the brand can live on under a new owner.
BT has shown tendency in the past the companies they have bought retaining their original brand identity. Plusnet being a prime example. Whenever you see Openreach mentioned it usually isn't in the same line as BT retail, as it separate regulated business. They have a chinese wall so to speak put in place mandated by OFCOM.
One of the big issues here is the backhaul of which BT provides extensively to all UK networks, I think that will transfer to Openreach where BT will still own the network but it will be sandboxed within the Openreach business much in the same way phone lines and broadband are now.
Some people are bemoaning the prospect of BT owning EE, however I don't think they will want to jeopordise the exist business either. EE as a brand and a business is largely free of legacy complaints, its a new company which will slot easily within the BT Groups business. I think what will happen is further partnerships from Sky with another network, they will be watching keenly. I do expect them to put up a significant battle to slow down the merger while they get their house in order for a potential mobile offering.
Whilst it won't sail through, compared to the EE merger which went on for time, I should expect this one to be swift comparatively. All they will need to do is divest the spectrum and hive off the broadband, along with changing management of the backhaul to openreach and they will be good to go.
BT getting into quad play services kills off Virgin Media's unique selling point and will enable them to offer attractive competitive packages. Cross platform sales will be very attractive. EE has roughly 27m customers I think?
BT will acquire more broadband and landline customers which will be a big boost to their customer base. They will acquire hundreds of premises they can utilise or sell off. EE were looking to buy a lot of P4U properties and their customer base, will this still go ahead and be naturally inherited by BT?
I think Sky and VM will be very worried about this deal. I wouldn't be surprised to see Sky try and buy O2 in a knee jerk reaction. They've made plenty of them in the past to try and dampen rivals momentums etc.
And Europe is more non English, so maybe they do not get controlled as much by the USA who produce the English speaking movies.
What would you think, or expect the fallout to be for the consumer?
Obviously EE's management do care which is why they are spending such vast sums. It's regarded as critical in improving their relatively poor customers service record. Net effect is three years down the line with both having spent similar amounts, O2 have 4G almost everywhere and EE have excellent customer care. Well that's the theory anyway.
It's possible of course that BT identified they could save something on EE's future capex plans with their own systems but obviously not on O2's RAN spend and this was part of their decision.
Has that been touted, or are you speculating?
Now that I don't know, if you were to watch HBO Go or Netflix in scandanavian countries the majority of the content is streamed in english with the option of subtitles. I think in western europe English is generally the accepted broadcasting language with regional compliments thrown in (unless you are in France in which anything other than French is sacrilege).
Language doesn't have much of an impact on the sale of rights, its generally down the to regulators involved. Sky has had it good for so long I really do expect their day to day business to change massively over the next 2 years. As cross selling picks up amongst mobile operators, it really is going to be left out in the cold.
What I find telling about Sky, when you call up to cancel you go through the usual hubub and give your notice. In my case it was cancelling everything broadband etc and moving across to BT, I receive that inevitable phone call asking why I am leaving. I explained that I wanted everything under one bill (I lie I didn't), anyway they couldn't come back with a decent offer for the broadband and phone line but offered me a rather sweet TV deal. When I asked them about the broadband and phone line I was met with stiff silence, I get the impression that paytv is Sky's only interest. I don't even think the broadband phone business earn them that much money compared to say BT or TalkTalk. I think in the next 12-18 months Sky is going to do some soul searching, trying to figure out what the company will look like in that time frame. I have no doubt they will enter the mobile market in a big way. However their traditional stranglehold on Sports and Film rights is under threat in a massive way. This is another company that will have to go through some restructuring to ensure it is fit and relevant in tomorrows world.
Sky, O2 and Three have the same problem (separately), what to do next. As the market heats up and I firmly believe it will, two of those companies will inevitably partner or merge.
Both there have been a few articles indicating an interest in their worldwide businesses.
Though I do suspect, maybe a bit like now, that people were locked into expensive phone plans. There is that quite weird ego thing that says, 'I own it so it has to be the best'.
:eek:
Yes......BT and Sky will be pulling out the cheque books for the next round of premiership tv rights. BT has been growing its TV platform quite solidly, I have a funny suspicion when the auction is over the rights will be more or less evenly split (unless a third entrant comes in which really would set the cat amongst the pigeons).
The difference between the two of them is telling, BT has broadly speaking a 10 year plan to grow its business horizontally, in essence getting back into the mobile sector, increasing its TV service offering, keener pricing on broadband etc.
Sky on the other hand has its TV which clearly is the bread and butter of the company. Yet its broadband and phone line segment doesn't command the same amount of interest. BT and Virgin know that the more services a customer holds with you the less likely they are to leave, in effect you lock them in. Sky only has this with the fixed line business and even then it isn't pushed like Virgin and BT.
BT with this acquisition is opening up new sources of revenue for the company, in addition it will also broaden their portfolio of businesses ensuring a stable and sustained income. Sky/O2/Three will be looking on in envy at Vodafone and BT when all is said and done.
I really hope this acquisition really does upset the apple cart by pushing down prices. I suspect however we won't realise those benefits until around 18 months or so after the merger whoever with is completed.
There isn't even one I can think of that hinted of sell-out, can you ?
Not sure where you got that idea, Hutchison is not part of EE, it is the name of the company that owns Three.
Whilst it used to own Orange many years ago, Hutchison has nothing to do with EE.
If film rights were sold in the manner similar a cinema then you would have a point. However they aren't, they are sold by territory or each individual country to usually a buffet of Pay TV companies.
Film rights excluding box office related purchases are unique in the UK market it is dominated by one provider who do admittedly sell on those channels to any willing TV platform. The crunch isn't around whether those channels are resold its more around the rights themselves and whether its anti-competitive one wholesale provider having exclusive rights on virtually everything released at the cinema.
Sports rights are managed differentlty to films in that each broadcaster buys agreed exclusivity for the packages sold. When you look at other markets film rights are sold to a myriad of providers rather than to single one as in the UK.
I'm glad they've seen sense and gone for the network which doesn't need substantial upgrades to bring it into this century!
This will complicate the MBNL arrangement though, especially if Hutchison bid for O2 now.
Absolutely nothing...