BT-EE deal cleared by Competition and Markets Authority

BT’s buyout of UK mobile operator EE for £12.5 billion (€16.7 billion) has been provisionally approved by the UK Competition and Markets Authority (CMA).

Announcing its decision, the CMA said that it does not expect the merger to result in a “substantial lessening of competition in any market in the UK.”

It said that while BT and EE are both large telecoms companies, they operate “largely in separate areas” with “limited overlap” – BT being strong in supplying the fixed communications services of voice, broadband and pay TV, and EE strong in supplying mobile services.

“We recognise that this is a merger which is important to many consumers and businesses. We have heard a number of concerns from competitors. After a detailed investigation, our provisional view is that these concerns will not translate into a competition problem in practice,” said CMA inquiry chair, John Wotton.

BT welcomed the decision today, with CEO Gavin Patterson commenting that “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.”

Commenting on the news, CCS Insight principal analyst, operators, Kester Mann, said: “Provisional approval of the £12.5 billion deal is a great boost to BT’s multiplay ambitions in a market rapidly evolving towards bundled telecoms services. The announcement that no remedies will be applied represents a particular victory for the company.

“Rivals such as Sky, Vodafone and TalkTalk have repeatedly expressed concern over the dominant position of the proposed new entity, particularly around mobile spectrum and backhaul. It is sure to further fan the flames of their calls for structural separation of Openreach from BT, currently being considered as part of Ofcom’s digital review of the UK market.”

BT struck a definitive agreement to buy EE in February, marking a major move into the quad-play market. At the time BT said it expected the deal to close by March 2016.

The CMA is an independent non-ministerial department of the UK government.