BT and EE brought out the big guns on Wednesday to talk up the benefits of their proposed merger
In their latest attempt to win over the U.K.’s competition authorities, BT CEO Gavin Patterson and EE CEO Olaf Swantee presented a report from Communications Chambers that identifies five industry trends – such as demand for data, bundled services and seamless connectivity, and the need to invest in networks, among others – that a combined BT and EE would be well placed to address.
"The success of the U.K. in the future will be built on its ability to deliver real-time, data-heavy information through leading edge network technology. Bringing BT and EE together makes that possible," declared Swantee.
"Seamless connectivity is the future and we are keen to deliver the new, innovative services of the future," said Patterson.
BT agreed to pay £12.5 billion for EE in February and the deal is currently being examined by the U.K.’s Competition and Markets Authority (CMA).
"I think that ultimately the deal will go ahead, but the big question for me is what will the remedies be?" said Steven Hartley, practice leader, service provider and markets at Ovum.
"I can’t see it going through ‘clean’," he predicted.
Last week the CMA opted to fast-track its review of the £12.5 billion deal to phase two because it believes the proposed merger does threaten competition, negating the requirement for a phase one investigation.
The CMA specifically cited the risk to competition in relation to wholesale access and call origination services to MVNOs and the mobile backhaul market.
Matthew Howett, who manages Ovum’s regulatory advisory service, said most of the other remedies i mposed on mergers in Europe – such as mandated wholesale access and spectrum divestments – don’t make sense in the U.K. because there is already a thriving MVNO market here.
"Spectrum-wise, the overall holding by BT/EE is within a cap recently floated by Ofcom," he added.
Furthermore, Ofcom has already suggested forcing BT to offer a dark fibre product, which would go some way towards alleviating concerns about a combined BT/EE’s position in the backhaul market.
"This is exactly the remedy Vodafone were calling for," Howett noted.
Indeed, Swantee stopped short of naming Vodafone, but he had some choice words for any company seeking to obstruct the BT/EE merger.
"These competitors only want to put up roadblocks, while we want to build motorways for the U.K.," he said, adding that opponents to the tie-up prefer to sweat their existing assets rather than invest in the future.
