BT appeals to competition watchdog over EE acquisition

BT claims its proposed acquisition of mobile network operator EE will be good for competition, investment and innovation

BT has claimed its proposed £12.5bn acquisition of mobile network operator (MNO) EE will be good for competition, investment and innovation in the UK, with both consumers and businesses benefiting from it.

In a submission to the Competition and Markets Authority (CMA), which is currently looking into the deal, BT said that because the number of UK MNOs would remain at four after the acquisition – namely EE, O2, Three and Vodafone – it would not reduce competition in either the fixed or mobile markets.

It said that the ability of its mobile and landline rivals to compete using the Openreach network would not be affected, and said its broadband and mobile market shares would remain under the threshold at which regulatory action would be justified.

The firm added that its enhanced presence in fixed-mobile and quad-play bundling would give customers looking for such offerings more options to choose from.

“A larger BT will be able to invest and innovate more than now, something that’s good for jobs and good for customers,” said BT CEO Gavin Patterson.

“The acquisition will lead to greater competition given our history as a natural and willing wholesaler, enabling other companies to use the networks we own.

“We provide wholesale access to companies in the broadband market and we are happy to support others who wish to compete in the mobile market as well,” he said.

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In its submission, BT asked the CMA to proceed straight to Phase 2 of its investigation, which would allow the watchdog to consider any complex issues in depth, without further delay, and a shorter end-to-end review period compared with its usual processes. The CMA is expected to make a decision on this early in June 2015.

Should the acquisition go through, BT would have 31 million mobile customers and the UK’s largest 4G network.

Consumer affairs advocate Which? is among those ranged against the deal, telling the CMA that the bundling of comms services in a quad-play offering made it harder for consumers to compare pricing to get the cheapest or most appropriate deal for their needs.

Additionally, BT’s communications provider competitors have called for outright separation of BT and its "arms-length" network infrastructure arm Openreach, arguing that the power it wields over the UK’s core network infrastructure means they have no incentive to invest.

Ofcom chief executive Sharon White confirmed in April 2015 that the regulator was considering its options with regard to the future of Openreach in an ongoing and wide-ranging review of the UK’s communications market.

Ofcom has also proposed that BT be made to open up its dark fibre infrastructure to rival providers to service growing demands for data capacity among business leased-line customers.

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