CMA approves BT's EE takeover

The Competition and Markets Authority (CMA) has announced its final clearance of the merger between EE and BT, the UK's largest fixed line network provider, and the UK's largest mobile network provider
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The Competition and Markets Authority (CMA) has announced its final clearance of the merger between EE and BT, the UK's largest fixed line network provider, and the UK's largest mobile network provider.

The CMA’s decision paves the way for BT to complete the acquisition of EE in the coming weeks and to incorporate the business into the wider BT Group in the months to come. There will be a distinct EE line of business following completion of the acquisition, led by Marc Allera who will become EE CEO following completion of the deal.

The ruling has faced strong objections from the telecoms industry, with companies including Sky, TalkTalk, O2, Vodafone, and Virgin Media having responded to the provisional findings in October last year with similar complaints. The merger, such companies argued, will have a negative impact on competition in the UK telecoms marketplace and will provide BT EE with an unequal and unfair percentage ownership of the UK's 3G and 4G mobile spectrum.

Dan Howdle, telecoms expert at consumer mobile and broadband advice site, Cable.co.uk, highlights another concern: "The CMA believes the new merged company is, by default, financially incentivised to continue to supply wholesale services to other providers (Virgin Mobile, for example runs on the EE network), which will prevent it from closing its doors to third-party operators in an attempt to monopolise its own network infrastructure.

"The greatest concern for its competitors, then, is that, though unlikely ­ as the CMA points out ­ no firm measure has been put in place to actively prevent it."

BT chief executive Gavin Patterson described the combined company as “a digital champion for the UK, providing high levels of investment and driving innovation in a highly competitive market.” He continued: “I have no doubt that consumers, businesses and communities will benefit as we combine the power of fibre broadband with the convenience of leading edge mobile services.”

Following completion of the deal Deutsche Telekom will have 12 per cent of BT shares and Orange will have four per cent. A representative of Deutsche Telekom will be appointed to the BT Board in due course.

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