BT has entered exclusive talks with the owners of EE for a potential £12.5 billion acquisition deal to give the former UK state telecoms firm the top position in mobile as well as fixed-line broadband services.

BT had been in competing talks with both the Spanish group Telefonica’s rival mobile firm O2 and EE’s owners, Orange and Deutsche Telekom, putting the 168-year-old fixed-line firm in a strong position in negotiating for a return to the consumer mobile market after 13 years away.

BT said it now expects further negotiations with EE’s owners to take several weeks under the exclusivity pact to reach a definitive agreement.

If completed, BT will pay for EE with a roughly 50:50 ratio of cash and shares for a combined value of £12.5 billion, although Deutsche Telekom will get a 12 per cent stake in BT and the right to appoint one board member while France’s Orange will get more cash and only a four per cent stake in BT. Analysts had been valuing EE last month at nearer £11 billion, and 02 at £9.4 billion.

“EE is a good asset, with a good network and good spectrum,” said Macquarie analyst Mark Murphy, who described the price as rational with a higher cash element than expected.

“You could see that as a sign that BT is pretty confident this is going to be a really important positive deal for them, and they are happy to do it in cash and the market is probably going to be happy to help them raise additional equity, which looks likely.”

The French and German companies each owned 50 per cent of EE, after a merger of their Orange and T-Mobile units in 2010.

The business, which had 24.5 million direct customers, stole a march on its rivals when the regulator allowed it to re-use existing airwaves to launch 4G services nearly a year ahead of its competitors.

Analysts and bankers have said BT’s choice was likely to provoke further moves towards industry consolidation in Britain, where the market is split between four mobile network operators and four separately-owned fixed-line broadband providers.