UK Competition and Markets Authority’s approves BT’s acquisition of EE


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Editor

| 15 January 2016




The UK’s Competition and Markets Authority (CMA) has given the green light for BT to fundamentally change the country’s telecoms sector with the acquisition of rival EE.



The buyout has been something of a saga. It was first announced in December 2014 that it would make a return to the mobile business by buying the former T-Mobile/Orange joint venture in a deal valued at £12.5 billion. BT claimed at the time that the acquisition would have many customer benefits such as combined fibre broadband, Wi-Fi, plus what it claims will be the UK's most advanced 4G network.

EE currently has 31 million customers in the UK, of which 24.5 million are users of mobile services and 834,000 from fixed broadband. Post acquisition, BT intends to sell its broadband, fixed telephony and pay-TV services to those EE customers who do not currently take a service from BT.

BT welcomed the CMA’s decision to approve its acquisition, unconditionally, and revealed that there will now be a distinct EE line of business following completion of the acquisition. This will be led by Marc Allera who will become EE CEO following completion of the deal.

After the deal goes through, Deutsche Telekom will have 12% of BT shares and Orange will have 4%. A representative of Deutsche Telekom will be appointed to the BT Board in due course.

“The combined BT and EE will be a digital champion for the UK, providing high levels of investment and driving innovation in a highly competitive market,” commented BT chief executive Gavin Patterson. “I have no doubt that consumers, businesses and communities will benefit as we combine the power of fibre broadband with the convenience of leading edge mobile services.”

Stéphane Richard, Orange Group chairman and CEO, added: “The approval of this operation is an important milestone in the Orange Group’s history. Part of our DNA was forged in the UK and we are very proud of what we have achieved over the past 15 years through Orange and then EE. The combination with BT is a very positive step forward for UK consumers who are set to benefit from convergent fixed-mobile services. We are very happy with today’s decision, which provides an important signal for telecoms operators across Europe that the sector is ready for fixed-mobile consolidation.”

Offering his opinion on what BT should do in the short term, Kester Mann, principal analyst, operators at CCS Insight said that among BT’s greater priorities was behind-the-scenes integration of the UK’s largest fixed-line and mobile operators. Only then should it look to articulate changes to consumers. “The deal paves the way for significant high-street rebranding. BT’s lack of retail presence is its Achilles heel, but converting EE shops will enable it to present and communicate bundles of mobile, broadband and TV face-to-face,” he remarked. “This could give it a major boost as the UK market inexorably evolves towards multi-play.”