Is BT buying EE for £12.5bn good or bad for consumers?
What’s the news?
BT is getting back into mobile. Years ago BT sold off its BT Cellnet mobile arm to Spanish firm Telefonica, which rebranded it as O2… but BT has confirmed that it is buying EE for £12.5bn.
Of course, big money deals with big companies take a long time, so don’t expect to see EE disappear just yet – after all of the due diligence and approval from competition and telecoms regulators, we’re probably looking at late 2016 or 2017 before “BTee” becomes one.
Why could this be good for consumers?
BT has been poised to re-enter the mobile market since it bought a share of the UK’s 4G spectrum when it was auctioned off in 2013 – this gave it a slice of the airwaves to offer mobile services of its own. We had previously been expecting it to launch its own mobile network.
Wading in by buying another company though is a clever move, as it gives BT a bigger market share and pool of customers from the get-go, cementing its place as a key player and a heavyweight that can compete on “Quad Play” services – that is to say, mobile, home broadband, TV and landline phones.
The expectation from other companies that BT will soon be competing on mobile has also led to the likes of EE launching its own TV service (which it might no longer need now BT has picked it up) – and Vodafone rumoured to be doing the same. So for BT, even if it didn’t want to start a mobile service, other companies are already bringing the competition to its home turf.
There are conceivable advantages to companies competing on “Quad Play” services, as BT and whatever competitors are left (Three is trying to buy O2 as we speak) would be able to offer cheaper packages to anyone who uses the company for all of their telecommunication needs – and also the efficiencies made in terms of people in offices shuffling paper and the like means lower costs for all of these services… which could lead to further lower prices for us.
…And why could this be bad for us?
The flip side to all of this is that by knocking out one of the major players, BT could make the telecoms industry even less competitive – which could drive prices up as companies don’t feel the need to drop prices to compete.
Similarly, there’s also a big question over control: Do you really want to hand over such a significant chunk of your life to one company? Do you want one singular company knowing what you watch, who you call, what you download and so on?
And anyone who has ever tried to deal with BT and EE customer services can surely only imagine what horrors await in the combined company.