The Competition and Markets Authority (CMA) has given its provisional clearance to BT’s proposed acquisition of EE.
The Authority concluded the two companies operate in largely separate areas with BT strong in the supply of voice, broadband and pay-TV and EE in mobile telephony.
One area of concern is the supply of wholesale mobile services – EE is the MVNO provider to Virgin Media – but the Authority found that the merger is not expected to result in a substantial lessening of competition (SLC) in any market in the UK.
John Wotton, Inquiry Chair said: “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.
“We provisionally think that the retail mobile market in the UK, with four main mobile providers and a substantial number of smaller operators, is competitive. As BT is a smaller operator in mobile, it is unlikely that the merger will have a significant effect on competition. By the same token, it is unlikely that the merger will have a significant effect on competition in the retail broadband market, where EE is only a minor player.”
Ten areas of concern were considered by the Authority, there was a unanimous view in finding no issues in all but one, the exception being mobile wholesale. Here the Authority was evenly divided, but rules on an SLC require a two-thirds majority, so this too was passed.
The CMA has extended the deadline for its final report by eight weeks to 18 January 2016.
BT is to pay £12.5 billion for the Deutsche Telekom-Orange JV that is the biggest mobile telephony company in the UK. It currently holds 31 million customers including 24.5 direct mobile customers and 834,000 fixed broadband customers.
