UK broadband provider CityFibre has become the latest company to raise concerns about BT’s £12.5bn (US$18.7bn) takeover of mobile network operator EE with the local Competition and Markets Authority.
CityFibre signed a long-term national framework…
UK broadband provider CityFibre has become the latest company to raise concerns about BT’s £12.5bn (US$18.7bn) takeover of mobile network operator EE with the local Competition and Markets Authority.
CityFibre signed a long-term national framework agreement with EE, Three, and their infrastructure joint venture MBNL last November to supply dark fibre backhaul connections to towers across both operators’ networks.
Work on the project begun in Kingston-upon-Hull last year and was described as “the first step in an anticipated larger build-out” by CityFibre, which saw the model as a way to expand its network.
Openreach, BT’s infrastructure unit, offers a similar service to mobile operators and CityFibre fears the takeover of EE will impact the 2014 agreement.
A CityFibre spokesman said: “Post BT/EE, the framework has been effectively neutered and the UK is unlikely to benefit from an accelerated rollout of metro fibre to 100 cities.”
“In a post BT/EE world, MBNL should continue to be able to buy from the provider of best value and choice and not be compelled to buy from BT.”
The comment was made to the CMA in the preliminary invitation to comment on its review of BT-EE, which ran from 4 March to 18 March.
CityFibre’s alarm stems from the fact that Openreach, while functionally separate from BT, will not be entirely independent of the combined BT-EE.
While CityFibre did not go as far as calling for a complete structural separation of Openreach from BT, others have. Vodafone led the calls, and was joined by Sky and TalkTalk when Ofcom announced a strategic review of digital communications on 12 March.
One of the operators’ chief concerns is that Openreach’s cash flow is not ringfenced, and BT does not invest these proceeds to upgrade the wholesale network, but rather expand its own business.
