FCS raises concerns over EE/BT deal

FCS raises concerns over EE/BT deal

The Federation of Communications Services (FCS) has raised concerns over the EE/BT deal on the basis that it could negatively impact upon market competition. The organisation also claimed that the deal was not moving as fast as has been reported and that any decision on the merger would be taken by the Competition and Markets Authority (CMA) in Britain rather than at a European level.

Speaking exclusively to Mobile, Chris Pateman, CEO of the FCS said: ‘We are very concerned about the concentration of power in competition terms, particularly for MVNO’s. We have met with the CMA and have planned to meet with Ofcom on 9 April to discuss the effect it will have. The possibility of so much power being in the hands of an organisation that has a long history of monopolising certain markets [BT] is worrying for us.

‘What do we want? We want them to understand the potential distortions that this deal could cause the market – it will affect all platforms. The ramifications would occur in both the fixed line and mobile markets. The fixed line market has had a host of regulations in order to make it competitive; if you want to set up a fixed line operation there is a set price that BT has to charge. In the mobile space there is no regulated wholesale price. 

‘Mobile is a fundamentally different market, but the prospect of a monopoly provider also controlling the price is a very worrying thought. In the fixed line space Ofcom’s emphasis was on breaking up the monopoly that BT had on the market. Ofcom’s approach to mobile has been very different, however; it was looking to build the network.’

Responding to the FCS’s claims that the BT/EE deal had the possibility to negatively impact upon the MVNO and wholesale mobile markets, a BT spokesperson said: ‘EE has a strong MVNO base and BT is a natural wholesaler with a strong track record here. We’re very open to offering wholesale services.’

Operator sources were also keen to point to the fact that while the fixed line space currently has one provider – BT Openreach – MVNOs can choose from four networks for wholesale services.

Pateman also told Mobile that he believed the pace at which the deal was moving had been exaggerated. This was rejected by sources close to the deal who told Mobile that they believed things were moving along well and that they were on course to notify in April.

Discussing the CMA hearing with Mobile, a BT spokesperson said: ‘We are pleased the CMA has asked industry for its views. This was always going to be part of the process and we welcome the fact that industry is being given an early opportunity to provide comments.

‘We believe the proposed acquisition will be positive for consumers, businesses and the UK, with BT creating a world-class digital infrastructure for Britain. Consumers and businesses will benefit from new products and services, as well as the increased investment and innovation this acquisition will bring.

‘The UK has one of the most competitive communications markets in the world and this will continue to be the case post-acquisition.’

CMA told Mobile that it hadn’t yet started the formal phase of the process, but had been encouraging interested parties to communicate with them during the preliminary stages, of which the FCS’s meeting had been a part.

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