BT’s £12bn takeover of mobile operator EE looks set to go ahead next year after the UK’s competition watchdog gave the deal its provisional backing.
A Competition and Markets Authority inquiry into the proposed tie-up found there would be little impact on competition because, while both BT and EE currently offer mobile services and home broadband, each was only a small player in the other’s core market.
The inquiry has also ruled it’s “unlikely” BT would cease to supply or seek to raise prices for “backhaul” connectivity services – which are used by mobile networks to carry voice and data traffic – in a bid to harm competitors or that EE would stop providing network access to smaller virtual mobile networks such as Virgin Mobile.
In their submissions to the inquiry both firms said doing so would simply undermine their own profitability as such services were available elsewhere and commercial partners could easily move provider.
Publishing today’s findings, John Wotton, Inquiry Chair said: “We have heard a number of concerns from competitors. After a detailed investigation, our provisional view is that these concerns will not translate into a competition problem in practice.”
“Having considered all the evidence, the group does not provisionally believe that, in a dynamic and evolving sector, it is more likely than not that BT/EE will be able to use its position to damage competition or the interests of consumers.”
Rivals and other stakeholders will have the opportunity to respond to today’s findings ahead of a final ruling being given in January.
BT CEO Gavin Patterson said: “We’re pleased that the CMA has provisionally approved BT’s acquisition of EE.
“The combined BT and EE will be good for the UK, providing investment and ensuring consumers and businesses can benefit from further innovation in a highly competitive market”.
EE CEO Olaf Swantee added: “EE welcomes the CMA’s provisional approval of our merger with BT. We now look forward to completing the deal quickly, and creating a new combined company designed to benefit both British consumers and businesses, while helping to propel the UK to the very front of global telecommunications”.