As the Competition and Markets Authority (CMA) gives the EE/BT merger its preliminary approval we ask what the decision means for the mobile market
The backlash begins
There were 20 submissions from interested parties to the CMA regarding the deal, many of them very strong worded and emphatic in their belief that any deal would be damaging for competition. Effectively the CMA has decided that there was not enough within these documents to fundamentally convince them that was the case. It seems highly unlikely that those who put forward the complaints will now go quietly. It’s been pretty evident from the public sparring that has taken place between Sky and BT that these disputes will run and run. Now that the CMA has given the deal its approval those against the merger will have to look for other platforms to air their objections. Ofcom’s review of the telecommunications market would be one option.
Vodafone ‘disappointed’ by BT/EE merger approval
Sweaty palms for Three and O2
There were some pointed statements in the CMA’s explanation for approving the BT/EE deal surrounding competition. It mainly concerned the number of major players in the market and whether the takeover would affect regulation. They must have made grim reading for those involved in the Three/O2 merger, which of course would reduce the number of major operators in the market. The CMA has already expressed its desire to investigate the deal and the latest announcement will do little to calm the anxiety of those who fear its intervention will result in the merger being blocked.
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The form of the beast
EE want to complete this deal quickly, that was evident from Olaf Swantee’s statement in reaction to the news. The question is what the combined business entity will look like. There are obvious areas which can be merged such as BT’s MVNO and EE’s broadband business. The big issues surround assets, structure and branding; will BT bring mobile in house or will it keep EE as a separate business unit? Which departments will be merged? And how will BT make use of EE’s huge retail portfolio? It is expected that cross selling and the bundling of services would be introduced fairly quickly, after all that was one of the key points made by both sides. But seeing how it all plays out will be an interesting watch.
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