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BT and EE slam 'self-interested' competitors for trying to derail merger

BT and EE make the case for merger in wake of competition watchdog inquiry

BT and EE claim their proposed merger will have a positive economic impact on the UK, while accusing “self-interested” companies of trying to sabotage the proposed £12.5bn deal.

The two companies have released a joint statement setting out how UK businesses and consumers stand to benefit from the deal, which is still subject to regulatory approval. If granted, the transaction is expected to complete by the end of March 2016.

According to the pair, joining forces will result in the creation of a company that will act as a “true UK digital champion” that will be positioned to respond to the country’s ever-growing demand for digital services.

As such, it will be able to invest vast sums in the deployment of 5G networks and ultrafast broadband services, which should establish the UK as Europe’s best-connected region.

To reinforce this, the pair pointed to the fact they have collectively invested around £35bn in the UK over the past decade, which they claim has contributed to country having the widest broadband coverage of any in the EU’s big five. Aside from the UK, these include France, Germany, Italy and Spain.

Gavin Patterson, CEO of BT, said UK businesses stand to gain a competitive edge on their overseas competitors as a result of the deal, while consumers will benefit from having access to network connectivity as and when they want it.

“The world is changing, with customers wanting access to the internet on their terms. They are spending more time online than ever before and they want the best connection whether they are at home, in the office or on the move,” said Patterson. “Seamless connectivity is the future and we are keen to deliver the new, innovative services of the future.”

The declarations come hot on the heels of the news that the Competition and Markets Authority (CMA) is planning to conduct an in-depth investigation into the proposed takeover after “significant” concerns were raised about how it could affect competition within the UK telco market.

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EE CEO Olaf Swantee hit back at the “self-interested companies” he claimed are trying to derail the deal, elsewhere in the statement. “These competitors only want to put up roadblocks, while we want to build motorways for the UK,” he said.  

The comments coincide with the release of a BT-commissioned report, conducted by media and telecoms consultancy Communications Chambers, into how merging with EE will help both firms address several trends that look set to affect the business and consumer markets in the years to come.  

These include the exponential demand for mobile data, the proliferation of internet of things (IoT) devices, and the push for enterprises to embrace digital services to improve efficiency and productivity.

In the Communications Chambers report, Rob Kenny played down the competitive impact the deal could have on the UK. “I conclude the merger has the potential to generate a wide array of customer benefits driven by enhanced investment, innovation, efficiency and competition for converged services,” he wrote.

“Notwithstanding the merger, the UK would continue to be a well contested market by comparison to its European peers, with some of the most pro-competitive market interventions globally.”

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My stance may not be popular here, but I'm not a proponent of the endless corporate mergers. Yes, they seem to be good for profits and shareholders, sometimes they even make product integration a bit easier, but most of the mergers we've seen have led to fewer completing products, less innovation, rising consumer pricing and an almost invariable reduction in jobs.

Mergers are for the benefit of shareholders and owners. Users, buyers and workers...? Not so much.
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