BT poised to make its case for EE takeover

TELECOMS giant BT is this week expected to make its submission to the Competition & Markets Authority on its proposed £12.5billion takeover of EE, the UK’s largest mobile phone group, in the face of fierce opposition from rivals.

The regulator’s investigation is likely to take the rest of the year or longer to complete if it decides to institute a full-blown, phase-two inquiry.

BT is likely to argue that the acquisition, which its shareholders have overwhelmingly approved, will not add significantly to its share of the mobile or broadband market.

However, its rivals disagree, with leading communications groups such as Vodafone expected to claim that BT will now have control of 57 per cent of the 4G spectrum for high-speed mobile broadband. A similar merger in Germany resulted in the authorities there insisting that excess spectrum was auctioned off.

A number of BT’s rivals have indicated that they will call for the company’s Openreach division, which oversees its fixed-line network, to be split from the company. Openreach sells broadband capacity to rivals on a wholesale basis.

Sky’s chief executive, Jeremy Darroch, has already called for the division to be demerged to enhance competition in the sector because it is the UK’s only nationwide broadband provider.

But BT is expected to argue that its operation of Openreach is already highly regulated.

Group chief executive Gavin Patterson last week warned that its investment in superfast broadband rollout could be at risk if Openreach was hived off.

The company is now a major provider of live sports rights broadcasting after its success in securing a package of live Premier League football rights earlier this year, with Sky holding the rest in a deal worth £5billion.

BT last week reported full-year profits up 14 per cent to £2.6billion for the 12 months to March. The company is also rolling out its own mobile operation before its merger with EE becomes operational later this year, if clearance is given. It has signed up more than 50,000 mobile customers since March.