BT persists with EE merger propaganda campaign

BT has fired another salvo in its PR campaign to persuade the UK competition authority to OK its acquisition of EE, arguing the combination will result in a “true UK digital champion”.

The catalyst of BT essentially reiterating the claim it made a month ago would appear to be the comments earlier this week from EU competition boss Margrethe Vestager calling into question the rationale behind telco mergers and suggesting they may diminish private sector infrastructure investment.

Gavin Patterson, BT CEO, was the prominent player in the latest announcement, ably supported by EE Chief Exec Olaf Swantee. They were keen to insist that the deal would result in ‘continued investment’ and consumer benefits, even going so far as to suggest the deal would be good for its UK competitors, due to the wholesale access offered to BT and EE networks.

“The world is changing with customers wanting access to the internet on their terms,” explained Patterson. “They are spending more time online than ever before and they want the best connection whether they are at home, in the office or on the move. Seamless connectivity is the future and we are keen to deliver the new, innovative services of the future.”

“A world-leading, combined fixed and mobile, digital infrastructure will sit at the heart of a successful UK economy,” insisted Swantee. “The success of the UK in the future will be built on its ability to deliver real-time, data-heavy information through leading edge network technology. Bringing BT and EE together makes that possible.”

Why BTEE feels the need to share its CMA pleading with everyone else is unclear, but Paolo Pescatore, Analyst at CCS Insight, reckons there’s plenty more to come. “This is the start of BT and EE setting out a strong benchmark as they move into phase 2 of the acquisition,” he said. “Positioning themselves as ‘digital champions’ reflects the significant investment that BT has made in not only its ultrafast broadband network, but also its recent focus on BT TV and BT Sport and EE’s move towards 4G and driving network innovation.

“As the deal comes close to finalising, rivals will be calling for lower prices, greater access to BT’s network and even a full demerger of Openreach. While there are merits of BT’s acquisition of EE, regulators will be duty bound to listen to the comments of their competitors who will feel less positive about the transaction and the increasing monopolisation of the telecoms sector.”

BT is certainly investing, but not perhaps in the areas Vestager has in mind. The most recent example was the acquisition of exclusive UK rights to AMC show Fear the Walking Dead (being filmed in the above image), a spinoff of the massively successful Walking Dead series. Acquiring unique content is, of course, a great way to acquire and retain customers, but its benefit aside from that is limited.

“BT’s deal with AMC is a step in the right direction. It is important for BT as it looks to strengthen its rights position beyond sports, especially as it is using BT Sport to drive people to sign up to BT TV,” said Pescatore. “With not all members in the household interested in sports content, the deal with AMC broadens the customer demographic for BT.”