The U.K.'s largest broadband provider BT Group has entered into exclusive negotiations to acquire Britain's largest mobile network group EE for $19.55 (£12.5) billion.

The deal comes amid reports that BT was looking to buy out either EE or O2 in a bid to offer four main digital services: mobile, landline, TV and broadband, in one package.

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Mobile operator EE is currently owned by Deutsche Telekom and Orange. BT will offer a mix of cash and shares of BT to both owners; Deutsche Telekom would take a 12 percent share in BT, while Orange would take more cash and a 4 percent share.

BT has not given full details on how it intends to pay for EE, considering it has one of the largest pension deficits in the FTSE 100. The TV provider also has to save some cash for Premier League matches, competing against rivals Sky and Virgin Media for primetime.

The acquisition would allow BT to create a seamless move from WiFi to 4G LTE on mobiles and should increase annual revenue by £6.5 ($10.16) billion. EE has the majority lead in the 4G spectrum across the UK, and has the most 4G subscribers at 6 million.

EE also offers a fiber optic service running at 100Mbps, higher than BT's top-end offering. BT might integrate the fiber optic service into the broadband deal, for high-end customers.

The deal will most likely be objected by Virgin Media and Sky, BT's two rivals in the broadband market. Acquiring EE would give BT a strong hold on both the wireless and broadband markets, which may be seen as anti-competitive.

It has been easier than expected to get the French and German owners onto the table. Analysts predicted BT would have a hard time acquiring the service, due to the joint ownership of EE.

The acquisition has made Virgin Media and Sky both look for potential wireless options. Hutchison Whampoa, the owner of Three and Sky are both eyeing up a deal with O2, while Vodafone has apparently been approached by Virgin Media's parent Liberty Global.

TagsEE, BT Group, Deutsche Telekom, Orange, wireless operator, UK