The UK's competition watchdog agreed to a request by BT to fast track an investigation into the effects of its planned £12.5 billion (€17 billion/$19 billion) acquisition of mobile operator EE, in a move that cuts the process by around 25 days.
BT, which is in the process of buying the mobile operator from Orange and Deutsche Telekom, asked the Competition and Markets Authority (CMA) in May to move straight to a full phase 2 investigation, bypassing phase 1. The purpose of the first phase is to establish whether a deal might be expected to reduce competition and typically lasts up to 40 days, but in this instance was completed in 15 days.
The CMA said it found that the transaction "gives rise to a realistic prospect of a substantial lessening of competition in relation to the supply of wholesale access and call origination services to mobile virtual network operators and fibre mobile backhaul services to mobile network operators in the UK. It has therefore decided that it is appropriate to proceed with a fast track reference of the merger to phase 2."
The CMA now has up to 24 weeks to come to a decision, and also has the option to extend the phase 2 probe by a further eight weeks if deemed necessary.
BT agreed definitive terms in February to buy EE from its existing owners and has presented its arguments in favour of a merger that would combine the former incumbent's 10 million retail customers with EE's 24.5 million mobile subscribers.
In May, the operator claimed that the acquisition would enhance rather than reduce competition in the fixed and mobile markets, with the number of UK mobile network operators remaining at four.
If it succeeds in buying EE, BT would have a 32 per cent share of the mobile and fixed telecoms market. The company has already faced calls from rivals including Sky and TalkTalk for the formal breakup of its Openreach business, while Vodafone UK is expected to seek greater control over access to BT's broadband network.
Meanwhile BT and EE separately unveiled further developments in their own service strategies this week, with EE revealing plans to enter the "Internet of Things" market and BT stepping up its challenge to Sky by offering all 351 matches from the UEFA Champions League and Europa League next season for free within BT TV plans.
EE said its new "connected strategy" would see it develop its own products, the first being a 4G action camera called 4GEE Action Cam that allows users to film and stream content while on the go. The operator added that it plans to "work with innovative businesses to deliver new and exciting experiences for customers" and would focus on four key areas: connected work; connected home; connected car; and connected you, which includes personal gadgets such as the Action Cam.
For more:
- see the CMA statement
- see this EE release
- see this Reuters article
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