Ofcom is not particularly concerned by the potential impact on competition stemming from BT’s plan to merge with EE, at least if a recently-published submission to the U.K.’s Competition and Markets Authority (CMA) is anything to go by.
The U.K. telecoms regulator is not in a position to rule on the proposed £12.5 billion takeover, but has submitted its comments to the CMA, along with other stakeholders. Its document was compiled late last month and added to the CMA’s Website on Thursday.
Overall, Ofcom believes it already has the powers to protect the market from any threat to competition.
"Many of the competition issues that are potentially raised by the BT/EE merger are either covered by the existing regulatory measures we have taken or fall within the scope of these regulatory powers," the regulator said.
Ofcom addressed many of the key areas of focus raised by the CMA in the statement of issues it published last month, including the impact on the retail mobile market, the provision of wholesale mobile and mobile backhaul services, and the fixed broadband sector.
Regarding the loss of BT as a potential competitor in the retail mobile market, Ofcom noted that much will hinge on the outcome of the planned tie-up between 3 UK and O2, however it made it clear that it sees no serious causes for concern in any of the possible scenarios.
Should that merger not go ahead, the only possible impact on competition from the BT/EE merger would be if their rivals were unable to meet growing demand, Ofcom said, but added that this problem is unlikely to arise since all mobile operators will have the opportunities to increase capacity going forward.
If the 3/O2 merger takes place without t he European Commission imposing any remedies on it – preferential access for MVNOs or incentives to attract a new player into the market, for example – the BT/EE tie-up could end up reducing competition in the market, Ofcom conceded. But most European deals have had conditions imposed upon them. BT would be in a position to take advantage of those remedies only if the EE buy does not go ahead.
The regulator shared similar responses to similar competitive threats in other areas of the market, in all cases highlighting possible competitive threats, without expressing any serious concerns.
Ofcom being Ofcom, there is no clear conclusion in its report. However, reading between the lines, it is pretty clear that the U.K. regulator does not share the same fears as many of BT and EE’s rivals have expressed regarding the impact of the proposed merger.
