Dixons Carphone has warned that the combination of BT/EE could be bad for price and competition if the merged business was allowed to pursue a ‘direct only channel strategy’.
In its submission to the Competition and Markets Authority (CMA) regarding the merger, the retail giant explained that it could see positives in the development of multiplay services and improved network experience.
However, the retailer added that if an aggressive pricing strategy was adopted by quad play brands there would be a negative impact on competition.
Dixons Carphone also warned that the merger could ‘drive the uptake of complex and lengthy quad play contracts making it much harder for consumers to switch providers when their contract ends.’
The brand’s argument demonstrates once again the importance of major network contracts to the independent mobile retail market. Despite Phones 4u’s exit and Dixons Carphone’s seemingly overwhelmingly strong position, the danger of operators deciding to pursue a direct strategy at the expense of an independent brand remain very real.
In its submission to the CMA Dixons Carphone said: ‘Quad play providers may offer contracts that are heavily discounted for the first few months to attract customers, creating high barriers to entry for smaller non-quad play providers (e.g. MVNOs) and thereby reducing the choice of tariff and brands available to the consumer.
‘We believe that it is important that the BT/EE merger does not result in the creation of any incentive to remove BT/EE products from indirect channels, to ensure that consumers remain able to benefit from mobile choice and comparison (including in respect of products from the largest fixed and mobile telecoms operator, which BT/EE would create). This will be particularly important as BT/EE will be selling complex quad play bundles and therefore the indirect channel will be vital in helping customers understand these offerings and ensuring that pricing remains competitive.’
It’s been a dramatic fortnight at the UK’s largest retailer who informed customers that its IT division had been hacked last week.
Responding to Dixons Carphone's submission a spokesperson for BT said:'We would like to reassure Dixons Carphone that both BT and EE have track records of being willing and enthusiastic wholesalers, and we intend that to remain the case.
'We’re pleased Dixons Carphone agrees that a combined BT and EE provides greater opportunity for product innovation, and gives us greater opportunities to invest in building a world class digital communications infrastructure for the UK’s future.
'We also agree that the deal means consumers will benefit from a range of new ‘best in class’ fixed-mobile services, which will deliver more choice and better value for money.'