News

BT takeover of EE

The Competition and Markets Authority (CMA) has given the final clearance for BT’s contentious £12.5bn takeover of EE, Britain’s largest mobile phone network. The regulator does not expect that the takeover would lead to a substantial reduction in competition or detriment to consumers in any market in the UK.

The CMA had provisionally cleared BT’s acquisition of EE, but the decision attracted criticism that the group would become too dominant across the consumer and business telecoms markets (1).

The regulator, however, noted that there was little overlap between BT’s mainly fixed phone, broadband and pay-TV business, and EE’s mobile phone operation. The merger was also unlikely to lead to a reduction in service for other operators using BT’s network (2).

“The retail mobile services market in the UK is competitive, with four main mobile providers and a substantial number of smaller operators,” John Wotton, Chairman of the CMA inquiry, said (3).

The takeover will give BT more than 25 million mobile customers. The former telecoms monopoly has been without a strong mobile business since the de-merger of its Cellnet division in 2001.

Gavin Patterson, BT Chief Executive, said: “The combined BT and EE will be a digital champion for the UK, providing high levels of investment and driving innovation in a highly competitive market” (1).

Two of BT’s primary competitors, O2 and Three, also plan to merge, which could leave the UK mobile market to just three network operators. The European Commission is investigating O2’s plans in a separate inquiry, with an outcome due in the spring (4).

 

  1. http://www.ft.com/cms/s/0/51dab668-bb58-11e5-a7cc-280dfe875e28.html#axzz3xIprewDU
  2. http://www.theguardian.com/business/2016/jan/15/bt-ee-takeover-green-light-cma
  3. http://www.bloomberg.com/news/articles/2016-01-15/u-k-competition-authority-clears-bt-s-12-5-billion-purchase-of-ee
  4. http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/telecoms/12099495/BTs-12.5bn-merger-with-EE-set-to-be-finalised-after-six-month-investigation.html