BT has formally submitted its acquisition of EE to the Competition and Markets Authority and asked the antitrust authority to go straight into an in-depth Phase 2 investigation of the takeover.
Skipping to the second phase will allow a shorter…
BT has formally submitted its acquisition of EE to the Competition and Markets Authority and asked the antitrust authority to go straight into an in-depth Phase 2 investigation of the takeover.
Skipping to the second phase will allow a shorter end-to-end review period than the CMA’s usual process, BT said.
The incumbent expects the regulator to decide on its condensed proposal in three weeks’ time. Even if BT is allowed to move straight to the in-depth investigation, it still does not expect to be able to close the deal until the end of March 2016.
Laying out its argument for why it should be allowed to buy EE, BT said it would give consumers more choice of fixed-mobile services and quad-play bundles, where it said Virgin Media and TalkTalk were the leading providers.
BT added that the acquisition wouldn’t reduce the number of operators in either the mobile or fixed-line market, nor would it increase its market share in the mobile or broadband market.
In a statement, BT also addressed Openreach, which provides backhaul services to EE’s competitors. BT’s ownership of both the infrastructure unit and EE is a point of contention for other mobile operators.
“The ability of BT’s landline and mobile rivals to compete with BT using its arms-length Openreach network will be unaffected by the acquisition,” the company said.
Of EE’s rivals in mobile, only Vodafone has put its head above the parapet to comment on the deal; O2 and Three are finalising their own merger which is expected to face even more scrutiny from regulators than a BT-EE deal.
Vodafone CEO Vittorio Colao warned earlier this year that it would be very tempting for the combined BT-EE to restrict access to certain exclusive content and “suffocate” the rest of the market. He added that BT would have to “behave well”.
TelecomFinance understands that Vodafone would prefer a structural separation of infrastructure division Openreach from the BT group, which provides all operators with mobile backhaul, or at least stronger regulation imposed on the unit.
However, a variety of industry insiders have told TelecomFinance that a structural separation of Ofcom is not on the cards for now.
Gavin Patterson, BT’s CEO who has led the incumbent into pay-TV and now mobile, has said the EE deal will be “good for consumers, businesses and UK plc, as well as for BT shareholders”.
“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,” Patterson said.
Addressing the concerns of its competitors, Patterson said: “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.”
Last week, Ofcom presented plans to allow BT’s competitors access to Openreach’s physical fibre network.
Under the regulator’s proposal, BT would have to offer so-called dark fibre to other providers, which would then use their own equipment to control the connection.
BT is against the measures, which it argues would dissuade other operators from investing in fibre, and increase costs for Openreach, diverting “resources and [adding] more complexity just when we’re beginning to make progress on improving service”.
BT said its current offer has created “a level playing field and a vibrant, competitive market with hundreds of competing companies, large and small”.
