Last year, BT announced a corporate takeover of British network, EE, which itself was formed by the merger of the UK Orange and T-Mobile operations. At the time, EE was the largest UK carrier in terms of subscriber numbers but shortly after the BT / EE deal, Three UK’s parent announced a plan to buy another UK operator, O2, and in so doing so would form an even larger carrier. However, today’s news story is not about the relative size of the BT / EE network compared with the Three / O2 network, but instead to report that BT have today formally submitted their argument to the British Competition and Markets Authority (CMA) for the proposed acquisition of EE. In the press release, BT state that the deal will, “be good for competition, investment and innovation in the UK.” BT received shareholder approval earlier in May for the deal and released the infographic at the bottom of this article illustrating how great the deal is.
In the detail, BT’s submission to the CMA states that the £12.5 billion takeover will enhance competition in both fixed and mobile markets because the number of network operators will remain at four. This is perhaps a dig at the Three, O2 deal, which seems set to remove one operator from the British market. It is unclear how keeping the number of operators in the British market is going to increase competition. Another key part of the BT / EE deal is that BT will increase competition in the so-called “quadplay arena,” that is, for the provision of fixed line, mobile, broadband and television services. Currently, Virgin Media and TalkTalk are the dominant powers in the British quadplay market place; BT’s acquisition of EE should enhance their competitiveness.
BT has now requested the Competition and Markets Authority move to a “phase two investigation,” which is a shortcut designed to allow the regulator to consider complex issues in-depth without a meaningful delay. The CMA should confirm in three weeks if they are able to move to the second phase investigation, which rules out the phase one investigation (this could have seen the deal rubber stamped by October 2015). Instead, BT is optimistic that the deal and transaction will be complete by March 2016.
