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BT Looks for EE Acquisition Approval

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BT has made its formal submission to the UK’s Competition and Markets Authority, seeking approval for the proposed acquisition of EE. The company has said the acquisition will be good for competition, investment and innovation in the UK – and that consumers and businesses will benefit as a result.

Central to BT’s argument is the fact that the proposed acquisition will not reduce competition in either the fixed or mobile markets and will in fact enhance it, with the number of UK mobile network operators remaining at four. The ability of BT’s landline and mobile rivals to compete with BT using its arms-length Openreach network will be unaffected by the acquisition.

Following the acquisition, BT will have market shares in the broadband and mobile markets under the threshold that regulators normally look for before considering whether action is required.

Consumers will also have more choice when it comes to fixed-mobile services and quad play bundles. Virgin Media and TalkTalk are the current leading providers of such services and BT’s presence will lead to greater competition and better deals.

BT has asked the CMA to proceed directly to a Phase 2 investigation into the proposed acquisition. This is to allow the CMA efficiently to consider any complex issues in depth without delay, and offers a shorter end-to-end review period compared to the CMA’s usual processes. The CMA is expected to confirm in about three weeks whether it will move directly to a Phase 2 inquiry.

BT expects the process and the EE transaction to complete by the end of March 2016.

Gavin Patterson, BT Group Chief Executive, said: “BT’s acquisition of EE will be good for consumers, businesses and UK plc, as well as for BT shareholders, so we are keen to get regulatory clearance. A larger BT will be able to invest and innovate even more than now, something that’s good for jobs and good for customers.

“The acquisition will lead to greater competition, given our history as a natural and willing wholesaler, enabling other companies to use the networks we own.

“We provide wholesale access to companies in the broadband market and we are happy to support others who wish to compete in the mobile market as well.

“The UK is one of the most tightly regulated marketplaces in the world and that will continue to be the case ensuring all companies can compete on a fair basis.”