Competition watchdog sinks teeth into BT over EE takeover

The Competition and Markets Authority writes to stakeholders asking for views on BT's impending £12.5bn takeover of mobile operator EE

The Competition and Markets Authority is to scrutinise BT’s £12.5bn takeover of EE.

A spokesperson for the Competition and Markets Authority (CMA) confirmed that a preliminary invitation to comment was launched earlier in March 2015, and is due to end later this week.

The objective of the consultation was to allow interested third parties to make their views known on the acquisition.

But the spokesperson said no formal investigation had yet been launched.

According to the Financial Times, the CMA believes there are a number of areas to be examined, such as the future of mobile backhaul connections, and retail communications products such as quad-play packages.

The newspaper said a full merger inquiry would be one of the largest ever to come before the watchdog.

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Pressure on Openreach

The upcoming probe could trigger the much-discussed decoupling of BT’s broadband access business, Openreach, from BT.

Speaking to Computer Weekly earlier this year, Mark Collins of fibre infrastructure builder CityFibre said: “We believe the best model for delivering a modern fit-for-purpose infrastructure should have the builder of the infrastructure independent of the ISPs that use it. That’s quite different to what Openreach does today.

Although he stopped short of calling for Openreach to be separated from BT, Collins said his concerns were amplified by the fact BT was now moving into mobile.

Other players are expected to voice opinions, especially in light of Ofcom’s recently announced strategic review of the digital communications market, which will be ongoing at the same time as the CMA’s investigation.

In the wake of Ofcom’s announcement last week, TalkTalk CEO Dido Harding said it was crucial to seize the opportunity to structurally separate Openreach from BT.

UK a competitive market, says BT

A BT spokesperson said: “We are pleased the CMA has begun to ask industry for its views. This was always going to be part of the process and we welcome the fact that industry is being given an early opportunity to comment.

“We believe the proposed acquisition will be positive for consumers, businesses and the UK, with BT creating a world-class digital infrastructure for Britain. Consumers and businesses will benefit from new products and services, as well as the increased investment and innovation this acquisition will bring.

“The UK has one of the most competitive communications markets in the world and this will continue to be the case after the acquisition.”

Following the closure of the acquisition, BT will find itself in possession of 31 million mobile customers, and the largest 4G network currently in operation in the UK. It expects to make a lot of money selling its broadband, fixed-line and pay TV services to EE subscribers, and converged fixed-mobile services to its own customers.

BT has previously said that “combining the power of fibre broadband with Wi-Fi and advanced mobile” will accelerate its mobile strategy and bolster its capacity for investment and innovation.

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