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LONDON, May 20 (Reuters) - Britain's Vodafone haswithdrawn from the running to provide a mobile service tofixed-line operator BT, two industry sources toldReuters, bringing to an end a nine-year partnership.
Vodafone had been the so-called mobile virtual networkoperator for BT, providing mobile services to staff, smallcompanies and multi-national corporations which are clients tothe BT Global Services division.
The Vodafone-BT tie-up was cancelled once Vodafone acquiredrival fixed-line business Cable & Wireless Worldwide, butVodafone had been in the running to win a new contract with theBritish firm.
Its withdrawal is likely to leave Telefonica's O2 and EE in the running for the BT deal. EE is the country'slargest mobile operator and is owned by France Telecom and Deutsche Telekom.
The proposition for an operator has become more attractivesince BT won a large amount of spectrum in a recent auction, toenable it to boost its wifi offering and consider launching afull BT-branded mobile service to consumers.
Sources have stressed however that any offering would besome time off and would rely on a partnership with an existingoperator.
"We can confirm we are making good progress with our tenderfor a mobile partner," a BT spokesman said.
"The 4G spectrum we obtained recently means we have a stronghand and that has been recognised in the bids we have receivedto date. We hope to conclude the process in the coming monthsand we will comment further when the tender has been concluded."
The deal could make the most sense for O2, the mobilebusiness that demerged from BT in 2001, because it did notacquire any of the high-frequency spectrum at the auction thatwas bought by BT.
One industry source, who declined to be named because thetalks were not public, said Vodafone had entered the process tosecure a new contract with BT, but had recently withdrawn afterreconsidering its options. Vodafone declined to comment.
