The UK’s competition watchdog has given BT’s £12bn takeover of mobile operator EE it’s final blessing.
The deal will see BT acquire EE’s entire UK operations and 28 million customers, making it the country’s largest mobile network as well as its biggest broadband provider.
BT already offers mobile services to around 300,000 residential customers through a wholesale deal with EE but is now expected to offer more integrated bundles of broadband, home phone, TV and mobile.
Today’s decision was widely seen as a formality after a Competition and Markets Authority panel gave the deal its unconditional preliminary backing last October.
A number of companies who gave evidence to the CMA inquiry warned about a loss of competition but the watchdog ruled that while both BT and EE currently offer mobile services and home broadband, each was only a small player in the other’s core market.
This, the panel said, meant consumers were unlikely to experience a significant loss of competition.
The CMA’s preliminary ruling also brushed aside claims, including from Sky, TalkTalk and Virgin Mobile, of a loss of competition in the wholesale sectors where BT and EE provide services to rivals.
Having reviewed submissions from rivals and stakeholders made since the publication of its initial findings, the CMA today confirmed it saw no reason to block the deal.
In a statement is said: “The merger is not expected to result in a substantial lessening of competition in any market or markets in the UK, including in relation to the supply of retail mobile, wholesale mobile, mobile backhaul, wholesale broadband and retail broadband services.”
John Wotton, Inquiry Chair, said: “Since our provisional findings, we have taken extra time to consider responses in detail but the evidence does not show that this merger is likely to cause significant harm to competition or the interests of consumers.”
Addressing concerns raised by some parties about wider competition in the marketplace and the role of BT’s Openreach network division which is used by most ISPS to provide broadband and phone services, Wotton said: “Our job has been to examine the specific impact of this merger on competition and consumers and, where relevant, we’ve looked at how these issues might be affected by the merger.
“There is also an ongoing Ofcom review into the sector and its future regulation, where such concerns may have more relevance.”
BT Chief Executive Gavin Patterson welcomed the CMA’s decision saying: “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.
“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. I look forward to welcoming EE into the BT family”.
BT says the purchase of EE will be completed on January 29th, just ahead of its next market update on February 1st.
Rival TalkTalk said it was “disappointed, although not surprised” at today’s decision and claimed the enlarged BT “will be even more dominant than it was before privatisation 30 years ago.”
A spokesperson added: “Given BT Group’s increased size and scale, the need to ensure that the UK’s broadband infrastructure is not neglected is more important than ever, and we have every confidence that Ofcom will take this into account when considering the future structure of Openreach.”
