BT’s takeover of EE has been met with cautious optimism by the industry’s mobile dealers.
The Competition and Market Authority’s unconditional thumbs up to the takeover has put to rest a year of uncertainty. Mobile spoke to a number of dealers about what the impact from the approved merger might be.
Northern Ireland based dealer Rainbow Communications explained that its initial worries about the competitive implications of the deal have now been reassured: ‘Whilst we had initial reservations as to how this takeover might affect Northern Irish consumers from a competitive viewpoint, we are reassured by the Competition and Markets Authority's decision that the acquisition is unlikely to harm competition. ‘
Approach with caution
Dealer 24 Seven also submitted its merger concerns to the CMA at the close of 2015. MD David Samuel has told Mobile that the CMA’s decision is not one that should be universally welcomed.
He said: ‘Whilst the CMA made the point that BT and EE largely operated in different areas of telecoms, this does seem counterintuitive to Ofcom’s promise to increase competition.
Consolidation of the market has been an ever present threat hanging over smaller providers and MVNOs such as my own.
‘There’s been a massive drive from Ofcom over increasing competition in the market, so for one telecoms giant, known for its aggressive market strategy, to be making inroads into an already cluttered sector, doesn’t scream ‘increased competition’ to us.’
Wait and see
However for some in industry the merger is welcome news. ‘I think it’s fantastic,’ Buzz Telecom MD Joe D’Souli told Mobile, ‘provided that they don’t squeeze the little guy I think it’s a good thing. BT will be very aggressive and that can only be a good thing for the consumer, how it will pan out for the dealers…we’ll have to wait and see.
‘The issue of competition doesn’t pose a big problem. There’s plenty of market room to manoeuvre, if the merger forces down costs and rentals that can only be a good thing. However then you need to consider what that will do to dealers when it comes to commission. We might have a turbulent time for a short time.
Talk Telecom hope the deal will mean a greater focus on wholesale agreements between BT and EE. Speaking to Mobile, MD Jason Halls said: ‘It will be interesting if BT came out with a wholesale agreement as they’ve never done that, it’s only been done through the dealer model but other carriers do billing and support so I’ll be interested to see what happens there. The market is going to get more competitive and other carriers will change their approach and it will be all eyes on BT.