As expected, the UK Competition and Markets Authority (CMA) fast-tracked fixed incumbent BT’s bid for EE, the country’s largest operator, for a more in-depth phase 2 review.
The regulator found that the transaction meets the test for reference because it gives “a realistic prospect of a substantial lessening of competition in relation to the supply of wholesale access and call origination services to mobile virtual network operators and fibre mobile backhaul services to mobile network operators in the UK”.
Significant competition concerns were also raised during the consultation about the impact of the merger on other markets, including the retail mobile market but, given that the criteria for a fast track reference were met by the two issues above, it was not necessary for the CMA to reach a conclusion at phase 1 about these concerns.
BT and EE recognised the test for reference at phase 1 would be met and actually requested fast-tracking to phase 2. The operators submitted a request on 15 May and the CMA started its investigation three days later.
Andrea Coscelli, the CMA’s executive director of markets and mergers and the decision-maker in this case, said there is “a real risk” that the proposed deal could reduce the incentive for BT and EE to supply “important inputs at the wholesale level, which enable other communications providers to compete at the retail level in the provision of mobile services”.