Prime Minister asked to intervene in BT/EE merger

Prime Minister asked to intervene in BT/EE merger

The Prime Minister is the latest political figure to be drawn into the debate surrounding the Competition and Markets Authority’s (CMA) decision to preliminarily approve the BT/EE merger.

Mobile was granted exclusive access to a letter from Phone Co-op CEO Vivian Woodell, who calls on David Cameron to ‘urgently take a closer look’ at the regulator’s decision to give the deal the green light. In the document, Woodell, whose business employs some 60 people in the Prime Minister’s constituency, raises the concern which has been expressed by both the Federation of Communication Services and the International MVNOx Association (iMVNOx), that the CMA didn’t take into account everything it should have before granting preliminary approval.

‘I would like to ask you urgently to take a closer look at the risks associated with the CMA’s approach,’ Woodell said, ‘not, as the Competition and Markets Authority’s investigation did, on the basis of existing technical regulatory definitions, but on the basis of what is it for the needs of a competitive UK business environment, both today and into the future. We believe this merger should not be allowed to proceed without remedies to protect and support a healthy wholesale market.’

The Phone Co-op boss used the letter to draw the Prime Minister’s attention to a number of points in particular – suggesting that the market definitions the CMA used when assessing the deal were outdated, as well as accusing the regulator of not properly taking into account the fact that BT had obtained a 4G licence and was poised to enter the market on its own. It also says that the regulator had not properly considered the barriers that prevent MVNOs changing from one network provider to another.

‘You will be aware that some mobile networks are pulling back from supplying wholesale markets,’ Woodell continues, ‘witness Vodafone’s withdrawal from Sainsbury’s Mobile recently, leading to its closure – and this limits the choice available to mobile virtual network operators (MVNOs) such as the Phone Co-op. We had therefore expected that the proposed BT acquisition of EE would trigger measures to protect and support the wholesale mobile market in the same way as current Ofcom controls on BT protect the wholesale fixed line market.’

Race against time

Pressure on Westminster from the mobile industry over the BT/EE merger has been increasing. Last week, iMVNOx, of which the Phone Co-op is one of the founding members, wrote to Ed Vaizey expressing concerns about the Competition and Market Authority’s decision to approve the BT/EE merger without remedies.

The time frame for those with concerns about the BT/EE merger is particularly tight; the
deadline for responses to the CMA’s preliminary decision was last night [19/11/2015]. If the government is to express an opinion it would need to happen before Christmas. Industry insiders anticipate that the deal between EE/BT could be completed as early as January or February 2016, as O2 CEO Ronan Dunne told Mobile: ‘We anticipate the preliminary approval will become final approval, subject to any objections that may arise, around the January/ February time frame.’  

This timeline for consultation was another area that Woodell called on the Prime Minister to address, writing in the letter: ‘The CMA has extended its deadlines for comment for a very short period. I hope that you will be able to intervene swiftly to ensure that their position is
reconsidered, so that we can all enjoy a genuinely fair telecoms market in the UK that fosters
innovation and benefits consumers of all kinds.’


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