Analyst View: BT/EE given the regulatory nod, while Three/O2 looks increasingly uncertain
Oct 28, 2015
As widely anticipated, the CMA has provisionally approved the merger of BT and EE. Here are thoughts from Ovum’s Regulation Practice Leader:
Of course the more challenging transaction to win regulatory approval will be that of Three/O2. Across Europe the sentiment for greater industry consolidation has waned following suspected price increases in markets where the number of mobile players fell from 4 to 3, and where as a result of the changing of the guard at the EU competition authority, a higher bar has been set to win the necessary approval.
Rivals to both BT and EE have been calling for the structural separation of the incumbent to remove any possible incentive for BT to prioritise its own retail divisions, particularly in relation to the supply of mobile backhaul products. The CMA has considered this as part of its review, however sees no substantial lessening of competition.
Separately however, Ofcom is still considering the future structure of BT as part of its digital communications review. While Ofcom continues to stress that all options are being considered, it’s felt that a full structural separation is likely to be disproportionate to fix any shortcomings of the current arrangement. We will know more in January 2016 when Ofcom is set to publish its initial conclusions.”
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