BT Mobile will be switching from Vodafone's network to EE's, pushing aggressively back into the mobile space it departed when it sold off Cellnet in 2002.
There aren't many details available on the move yet, apart from the fact that EE has been selected from a number of various possible suppliers (three, at an informed guess) and that EE will be providing carriage for BT Mobile. Both companies are hoping that existing customers get a "seamless" transition and that they'll be plenty more customers to add.
BT has always been in mobile, in one way or another. In 1986 it launched one of the UK's two mobile networks (the other being Vodafone-Racal) under the Cellnet brand, which got spun off in 2002.
Cellnet was already called O2 by that point, and is now part of Telefonica but had hoped to woo back its former parent, whose split with Vodafone became inevitable once Voda entered the fixed line business with its purchase of Cable & Wireless.
BT has been touting for a new mobile partner ever since, and EE's finally got the gig.
Today BT Mobile is a relatively small operation, mainly sold to corporate and enterprise customers as a bundle with fixed access and other services. That will continue, with EE carrying the traffic. This deal will likely see BT pushing into consumer mobile, as it becomes able to bundle mobile with broadband, TV and fixed telephony in the much-heralded "quad player" model.
EE has been moping up the MVNOs lately thanks to its 4G monopoly and surplus capacity provided by the merger of Orange and T-Mobile. Asda recently switched to EE, and alienated customers by telling them their prepaid credit wouldn't be transferred ("we'd suggest you run down your credit before joining us in the new network" says the FAQ), but BT's relationship with the UK's largest operator goes deeper than that.
The two companies tested spectrum sharing down in Cornwall well before this year's 4G auctions, to see if the same radio spectrum could provide both fixed and mobile coverage at the same time. Those tests showed it was possible - at 800Mhz at least.
In the auctions BT bought 30MHz of FDD spectrum (15MHz in each direction) at 2.6GHz, adjoining the blocks owned by EE, as well as 25MHz of TDD spectrum. Those blocks are expected to provide campus-wide (4G) networks for BT customers, who'll get handed off to the EE network once they wander off site, but there's the potential for much more interesting models too.
It's unlikely the neighbouring ownership was the deciding factor in BT's choice. These things tend to be financial, but it's a happy result which could serve both companies well. ®