BT argues competition will be ‘enhanced’ by EE deal

UK telco EE has formally submitted the case in favour of its acquisition of mobile operator EE to the UK Competition and Markets Authority (CMA), inevitably arguing the move will not reduce competition.

At risk of over-stating its case, BT even went so far as to insist competition will be enhanced, as there will be no reduction in the number of UK mobile operators. While that’s a reasonable argument for mobile competition not being reduced, it’s not clear exactly where the enhancement lies.

While BT doesn’t explicitly say so, the core of its argument seems to be that as a result of the acquisition consumer choice in the multiplay market will be increased. It maintains this in spite of the fact that both BT and EE currently have multiplay offerings of their own, with BT having recently launched an MVNO on EE’s network.

“BT’s acquisition of EE will be good for consumers, businesses and UK plc, as well as for BT shareholders, so we are keen to get regulatory clearance,” said Gavin Patterson, BT Group Chief Executive. “A larger BT will be able to invest and innovate even more than now, something that’s good for jobs and good for customers.

“The acquisition will lead to greater competition, given our history as a natural and willing wholesaler, enabling other companies to use the networks we own. We provide wholesale access to companies in the broadband market and we are happy to support others who wish to compete in the mobile market as well. The UK is one of the most tightly regulated marketplaces in the world and that will continue to be the case ensuring all companies can compete on a fair basis.”

It’s standard practice both to sugar-coat self-interest with a veneer of altruism and to lament the impact of regulation on investment, so there’s nothing new there. But Patterson’s point about the level of regulation BTEE will be subject to is valid and Ofcom is already contemplating imposing further conditions on BT as a wholesale supplier.

One other intriguing point made in BT’s public statement on its CMA submission, apart from the gratuitous infographic below, is that BT is asking the CMA to proceed straight to a phase 2 review.  In its presentation to shareholders just a few weeks ago BT still seemed to think there was a chance the deal could be approved at phase 1, but this implies that’s no longer the case and it hopes to get phase 2 concluded sooner than April 2016.

BTEE infographic

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