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UK competition watchdog provisionally clears BT's £12.5bn EE gobble

Briskly waves through telco takeover bid

BT's planned £12.5bn merger with EE has provisionally been given the greenlight by Blighty's Competitions and Markets Authority.

The regulator said this morning that the proposed acquisition, which is expected to be completed by March next year, was "not expected to result in a substantial lessening of competition in any market in the UK".

Its chair of the inquiry, John Wotton, said:

We provisionally think that the retail mobile market in the UK, with 4 main mobile providers and a substantial number of smaller operators, is competitive.

As BT is a smaller operator in mobile, it is unlikely that the merger will have a significant effect on competition.

By the same token, it is unlikely that the merger will have a significant effect on competition in the retail broadband market, where EE is only a minor player.

The competition inquiry has been briskly waved through by the watchdog, after BT successfully lobbied the CMA in July to hasten its investigation into the proposed multi-billion pound slurp.

BT was chuffed to have cleared the watchdog's hurdle. The former state monopoly boss Gavin Patterson said in a canned statement:

We're pleased that the CMA has provisionally approved BT's acquisition of EE.

The combined BT and EE will be good for the UK, providing investment and ensuring consumers and businesses can benefit from further innovation in a highly competitive market.

Competition concerns had been raised about the impact the proposed merger could have on the mobile market. Both BT and EE provide wholesale services – including mobile backhaul and broadband services – to rival ISPs in the UK.

The CMA was split on competition concerns with the wholesale mobile market. But the watchdog said that "a finding of SLC [substantial lessening of competition] requires a two-thirds majority of the group, and therefore no SLC has also been found in relation to that market."

A summary of the CMA's provisional findings can be viewed here (PDF) and the regulator is promising to publish a full report later this week.

The watchdog added that it would release its final report into the proposed BT/EE merger in January 2016, some 10 weeks later than it had originally planned. ®

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