Competition watchdog to rubberstamp BT gobble of EE

Regulator dots Is and crosses Ts – meanwhile staff wait for 'synergies'

woman on vintage rotary telephone 1950s

Blighty's competition watchdog is expected to wave through the £12.5bn acquisition of EE by BT this week, in its final piece of paperwork before the two become one in March.

The deal will create the first fully integrated "quadplay" company, offering fixed-line phones, broadband, mobile and TV. But of potentially greater importance to BT will be the "convergence" of its fixed-line and mobile broadband – creating a more seamless experience for users.

It will also see BT extend its presence on Blighty's high street, as the biz takes on EE's 580 shops. However, BT is expected to retain the EE branding.

The Competition Markets Authority already provisionally cleared the BT/EE deal back in October.

The deal could now theoretically clear the way for the former state monopoly to flog off its profit-flagging Global Services business and concentrate on the UK market.

Steven Hartley, analyst at Ovum, said the deal is the next logical step towards where the UK market is going. "Look around the world and you'll find a number of integrated players," he said.

He said the acquisition will likely have the biggest effect on the future of its Openreach division, which is under scrutiny by UK regulator Ofcom.

"BT and EE coming together is more disruptive [to the market] than Three and O2 coming together," he added.

Now the deal has gone ahead, it will be of great interest to see how the other telcos react.

According to The Daily Mail, Liberty Global – which owns Virgin – has resumed acquisition talks with Vodafone. If that deal does go ahead, a Virgin/Vodafone entity could compete with BT/EE on the same terms. The telcos had already been flirting with each other over a merger last year, but those negotiations ended in September.

According to research firm Enders Analysis, EE currently holds 32 per cent of the mobile subscriber market.

In its Companies House filing for the year ended 2014, group revenue at EE was £6.3bn, down 2.4 per cent. Loss before tax was £255m, up from a pre-tax loss of £101m in 2014. ®

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