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BT-EE merger is provisionally cleared by UK's CMA

by Mark Tyson on 28 October 2015, 16:06

Tags: British Telecom (LON:BT.A), Everything Everywhere

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Earlier today the UK's Competition and Markets Authority (CMA) provisionally cleared the merger of BT and mobile operator EE. The reasoning behind the decision is that the deal was "not expected to result in a substantial lessening of competition in any market in the UK". It first came to light that BT and EE were in discussions just under a year ago. The subsequent agreement was announced in February this year.

BT has welcomed the decision by the CMA and will now be able to forge ahead to become a so-called 'quad player' covering fixed-line phones, broadband, mobile and TV – like rivals Sky and Virgin. BT's current business was judged to not overlap significantly with EE's operations. However BT's reach in the UK will become bigger than its rivals in many ways; EE is the biggest mobile operator and BT was already the biggest fixed line telephony and broadband player.

Of course BT denies that the EE acquisition is anything but good for the UK as a whole. Gavin Patterson, the BT CEO, said "We're pleased that the CMA has provisionally approved BT's acquisition of EE. The combined BT and EE will be good for the UK, providing investment and ensuring consumers and businesses can benefit from further innovation in a highly competitive market". With the EE acquisition, BT's customer base will grow from 10 million to nearly 35 million.

Today's provisional judgement doesn't guarantee the deal will succeed, the final approval is scheduled for 18th January, after which the deal should complete by March. The news gave a boost to BT shares, which hit a three month high today. However shareholders are probably waiting for an Ofcom decision, regarding whether Openreach should, or should not be split from BT, before they pop open the champagne. We will know the result of that decision by the end of this year.



HEXUS Forums :: 17 Comments

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That'll be another line rental increase then.
Hmm, given that EE provide the backend for Virgin, I wonder if Virgin Mobile is perhaps looking for another partner that they can run their MVNO from - Three perhaps?

To me that would make a lot of sense given that:
BT “Mobile” would use EE backend;
Sky uses O2;
TalkTalk uses Vodafone;
Virgin currently uses EE too, but I can't see that being desirable for either post-merger.

Plus I thought that Virgin provides the backend for Three's “free” WiFi on the London Underground, so they've already got some commercial relationship.
However shareholders are probably waiting for an Ofcom decision, regarding whether Openreach should, or should not be split from BT
Yes it definitely should! :redcard:
Everyone's merging left and right or closing down.
Things are graveously bad and just keep getting worse
Same old, same old, in the largest open prison in Europe. Working sentence finished, time to leave!
and BT will quickly kill ee wireless broadband. not paying line rental to BT ever again. time to find another provider I think.