In one of two key developments affecting the British wireless market, the United Kingdom (UK) Competition and Markets Authority (CMA) approved provisionally BT Group’s proposed acquisition of Every thing Every where (EE) in a US$19.1 billion transaction that would give BT control of the largest wireless operator in the UK as well as the nation’s top highspeed broadband network. On the heels of the CMA ruling, European Commission (EC) competition authorities confirmed last Friday that they will conduct a formal, in-depth investigation of the proposed $15 billion merger of Three and O2 which would reduce the number of national competitors in the UK wireless sector from four to three.
Announced last February, the EE purchase marks BT’s return to the UK wireless sector after a 14-year absence and would give BT the ability to offer a bundled package of fixed and mobile voice, broadband and video services to British customers. Noting that BT and EE—a joint venture between Deutsche Telekom and Orange of France—are focused on different market segments, the CMA concluded that the deal is “not expected to result in a substantial lessening of competition in any market in the UK.” The CMA is expected to publish a report convey ing final approval of the deal in January . As a BT spokesman told reporters that the parties aim to complete the transaction in March, BT CEO Gavin Patterson asserted that the union of BT and EE “will be good for the UK, providing investment and ensuring customers and businesses can benefit from further innovation in a highly competitive market.”
Meanwhile, in confirming the planned EC probe of the O2-Three merger, EC Competition Commissioner Margrethe Vestager declared that the goal is “to ensure that consumers in the UK do not pay higher prices or face less choice” for mobile services. If approved, the combination of Three and O2—the British wireless division of Telefonica—would leapfrog EE as the top wireless carrier in the UK with 33 million subscribers. While voicing concern that the transaction “would remove an important competitive force” in the UK market, the EC also cautioned that the merged entity “would have limited incentives to exercise significant competitive pressures on the remaining competitors.” The EC has set a deadline of March 16, 2016 to terminate its investigation and announce its decision. As he expressed confidence that “the acquisition will be approved,” a spokesman for Hutchison Whampoa, the parent company of Three, touted the transaction as one that “will be good for both competition and consumers.”