The U.K. competition authority has elected to fast-track its review of BT’s planned acquisition of EE, as requested by the U.K. incumbent, which is keen to complete the deal.
The Competition and Markets Authority (CMA) on Tuesday said it will skip straight to phase two of the investigation because it believes the proposed tie-up does threaten competition in the market, making a phase one investigation unnecessary.
Essentially, phase one of the process is designed to enable the CMA to decide whether or not there is a competitive threat from a planned merger.
"The transaction…gives rise to a realistic prospect of a substantial lessening of competition in relation to the supply of wholesale access and call origination services to mobile virtual network operators and fibre mobile backhaul services to mobile network operators in the U.K.," the CMA ruled.
It added that other competition concerns have been raised related to the deal’s impact in areas including the U.K. retail mobile market. Third parties will be able to present their views during the phase two investigation.
"BT and EE are leading suppliers of U.K. telecommunications services and to gether they will have a strong presence in many telecommunications markets," said Andrea Coscelli, executive director of markets and mergers at the CMA, and decision-maker in the BT/EE case.
"They also supply important inputs at the wholesale level, which enable other communications providers to compete at the retail level in the provision of mobile services," he added. "We have found that there is a real risk that the merger could reduce their incentives to supply these inputs and that this could have a detrimental impact on the retail mobile market."
BT agreed to pay £12.5 billion for EE earlier this year.
Last month it formally submitted the proposed deal to the CMA, sharing its view that the tie-up will enhance competition in the U.K.
The merger would give U.K. consumers more choice and better deals when it comes to quad-play and bundled services, it insisted, noting that the multi-play market is currently dominated by Virgin Media and TalkTalk.
