BT's acquisition of EE has been given the go ahead

The deal will create a fearsome internet and mobile giant but Ofcom could still rain on BT's parade.

by Jack Torrance
Last Updated: 25 Feb 2016

Well that took a while. Almost 13 months after BT announced its £12.5bn plan to acquire mobile network EE, the deal has finally been approved by the powers that be. 

After gathering evidence and considering the concerns of BT’s competitors the Competition and Markets Authority (CMA) has concluded the takeover will not result in a ‘substantial lessening of competition’ (which it refers to as an SLC, as if this story needed any more acronyms) in the telecoms market.

‘The retail mobile services market in the UK is competitive, with 4 main mobile providers and a substantial number of smaller operators,’ said inquiry chair John Wotton. ‘As BT is a smaller operator in mobile, it is unlikely that the merger will have a significant effect. Similarly, EE is only a minor player in retail broadband, so again it is unlikely that the merger will have a significant effect in this market.’

BT welcomed the news (as you might expect) and said the deal will formally close on January 29. It looks like the EE brand will remain intact for a while. Its current chief commercial officer Marc Allera will be made EE CEO, replacing the departing Olaf Swantee, but there’s no word yet on Kevin Bacon’s future.

BT boss Gavin Patterson said the newly combined company would be ‘a digital champion for the UK, providing high levels of investment and driving innovation in a highly competitive market.’ The go-ahead is a big victory for Patterson but he still has plenty of regulatory wrangling to deal with.

The former state monopoly’s rivals are bitterly unhappy about its continued ownership of Openreach, the national broadband network that many of them rely on to get their services into consumers’ homes.

Fellow telco TalkTalk, which had opposed the BT/EE (or should that be BEETEE?) deal said it was disappointed with today’s decision, which will make BT ‘even more dominant than it was before privatisation 30 years ago.’

‘Given BT Group’s increased size and scale, the need to ensure that the UK’s broadband infrastructure is not neglected is more important than ever, and we have every confidence that Ofcom will take this into account when considering the future structure of Openreach,’ it said.

Ofcom is currently carrying out a review of the telecoms sector and its outcome could be pretty negative for BT. The regulator’s boss Sharon White has already said the status quo is not an option but it seems unlikely that BT will be forced to give up Openreach entirely. Nonetheless, the day Ofcom publishes its report is unlikely to be as happy a day for BT as today.

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