BT to buy mobile firm EE for £12.5bn

Telecoms group BT has paid £12.5bn to buy mobile operator EE.

The takeover creates a communications giant covering fixed-line phones, broadband, mobile and TV.

The stockmarket greeted the move by sending BT shares up over 5%, the highest since 2001 when it sold off its old mobile operation O2.

But rivals TalkTalk and Vodafone have already called for competition authorities to step in and force BT to spin off its Openreach operation.

The deal sees BT buying all EE shares currently held by Orange and Deutsche Telekom.

Then Deutsche Telekom will receive 12% in the new combined business and have a seat on the board.

Orange will receive a 4% stake, as well as about £3.4bn in cash.

The deal more than trebles BT's retail customers adding the 10 million it already had to EE's 24.5 million direct mobile subscribers.

Competition issues

But the deal puts BT in what many see as a dominant position in the market.

TalkTalk and Vodafone say regulators should force BT to spin off its Openreach fixed line division, which enables other telecoms companies to access its network.

Vodafone chief executive Vittorio Colao said: "Ideally, a structural separation of Openreach would be optimal."

Mr Patterson said he did not expect competition authorities to impose stringent remedies and the deal would need to be scrutinised in Britain, rather than Brussels