BT Tells Regulators That EE Takeover Will Boost Telecoms Competition

BT has submitted its case to receive clearance for its proposed £12.5 billion takeover of EE to the Competition and Markets Authority (CMA), arguing the deal will boost competition in the UK communications market, benefiting both consumers and businesses.

The transaction is likely to come under close scrutiny as the new combined company would boast both the UK’s largest fibre and LTE networks.

However BT says its market share in both the broadband and mobile markets would not exceed the thresholds that regulators normally look for in approving such deals, nor would it impact competitors’ ability to access the Openreach copper and fibre infrastructure.

BT EE Regulatory

It adds that the new BT would be better equipped to offer ‘quad-play’ packages of broadband, landline, mobile and television services to compete with the likes of Virgin Media and TalkTalk, providing more choice for consumers.

“BT’s acquisition of EE will be good for consumers, businesses and UK plc, as well as for BT shareholders, so we are keen to get regulatory clearance,” says BT CEO Gavin Patterson. “A larger BT will be able to invest and innovate even more than now, something that’s good for jobs and good for customers.

“The acquisition will lead to greater competition, given our history as a natural and willing wholesaler, enabling other companies to use the networks we own. We provide wholesale access to companies in the broadband market and we are happy to support others who wish to compete in the mobile market as well.”

BT wants to complete the deal by early 2016 and has therefore requested that the CMA proceed immediately to ‘phase 2’ of its inquiry. A decision will be made within three weeks, and the subsequent investigation could take up to 32 weeks.

The CMA opened its inquiry in March and has already received a complaint from CityFibre which said Ofcom should be allowed to enforce additional regulatory measures on BT if the EE takeover is given clearance in order to deliver a “level playing field.”

There has been speculation that BT might be forced to spin off Openreach as a condition of clearance but Openreach CEO Joe Garner has said “with great confidence” he does not expect this to happen.

Industry experts believe the deal will get the go-ahead, albeit with concessions –  possibly with regards to spectrum holdings.

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