17th Jul 2015 09:58
LONDON (Alliance News) - The UK Competition and Markets Authority Friday outlined the areas it will be investigating in its current phase II probe of BT Group PLC's GBP12.5 billion acquisition of peer EE Ltd, releasing a statement of issues.
The investigation was fast tracked to a phase 2 probe at the request of BT in May.
In the statement the CMA outlined ten 'theories of harm', namely scenarios that could result in a substantial lessening of competition and that it intends to investigate.
These include the potential for the merger to lead to the weakening of competitors in the retail mobile space, and of the merged companies having an ability and incentive to refuse to supply or offer worse terms for wholesale mobile services to mobile virtual network operators, or to increase the price or degrade the quality of wholesale retail broadband services.
Additionally, the theories address the potential for reduced competition in retail broadband in rural areas where retailers rely on BT Wholesale, and in superfast broadband.
The CMA says it will also take into account the takeover of Telefónica's 02 network by Hutchison Whampoa, which runs the 3 network in the UK. The CMA notes that the 02 and 3 merger, which is subject only to EU merger control for now, would bring together two of the four current mobile network operators in the UK. It will be considering whether this merger results in a significant impediment to effective competition.
The regulator said that should it conclude that the merger might result in a substantial lessening of competition in any markets, it will consider whether to introduce remedies, and if so what remedies might be appropriate.
Shares in BT Group were up 0.6% at 475.00 pence Friday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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