BT buys EE – are mobile mergers good news for customers?

BT has bought the mobile provider EE. O2 is expected to merge with Three. Is it time that the telecoms market was looked at by competition authorities? What do you think about these mergers?

BT today announced that it had bought mobile firm EE for £12.5bn, subject to approval by BT shareholders and the Competition and Markets Authority (CMA).

BT’s takeover of EE will create a telecoms giant covering broadband, phone lines, TV and mobiles. It said in a statement:

‘The combination of EE and BT will provide customers with innovative, seamless services that combine the power of fibre broadband with wi-fi and advanced mobile capabilities.’

What will happen to prices?

On its merger with EE, BT’s CEO Gavin Patterson hinted at cheaper deals for customers, saying that bundled fixed line and mobile services have reduced prices.

But there are other goings on in the telecoms industry. Sky has announced that it’s to offer a mobile service using O2’s network, and TalkTalk has bought some Virgin Media and Tesco Broadband customers.

Given that Three is also expected to buy O2, will these deals really be good news for us consumers? TalkTalk CEO Dido Harding has expressed concerns that mergers could lead to higher prices:

‘In Austria, where four mobile operators went into three, prices went up. People are right to be suspicious about too much consolidation.’

Competition in the mobile industry

We think that competition authorities should look at both the proposed mergers and the market in the round to make sure that you’re protected from unfair price increases or poorer service as a result of less competition.

This market has shown it has a long way to go to work well for its customers with a history of mid-contract price rises and millions of mobile customers paying more than they should. Unbelievably, people trust banks more than they trust mobile firms – there’s a danger that these mergers could damage that trust further.

What do you think of BT’s announced purchase of EE, and the expected merger between Three and O2? Do you think it could be good news for customers, or are you disappointed by less competition in the mobile market?

[UPDATE 28/10/15] – The Competition and Markets Authority has provisionally cleared BT’s takeover of EE, saying that it was ‘not expected to result in a substantial lessening of competition in the UK’.

John Wotton, chair of the CMA inquiry, said:

‘Having considered all the evidence, the group does not provisionally believe that, in a dynamic and evolving sector, it is more likely than not that BT/EE will be able to use its position to damage competition or the interests of consumers.’

Our executive director Richard Lloyd commented on the CMA’s announcement:

‘Fewer players in any market is rarely a good thing, and with the proposed O2-Three merger also due to be considered, it would be very concerning if the UK were to end up with only three mobile network operators. Ofcom now needs to make sure consumers are protected from higher prices or poorer service as a result of the merger.’

Comments

118

neil dixon says:

4 June 2015

26 minutes and still holding – EE cant even put up a facade of caring

35 minutes…welcome to the new uk and the tories

John de Rivaz says:

This just shows how useless and old fashioned the voice telephone has become. Any company that cares about its customers should provide email or web form access. That way, they can queue the messages and not the customers.

How many person-hours are wasted every day with people “holding on” to telephones?

Organisations that use telephone call centres should be boycotted, and Which? could call for call centres to be abolished.

The government may need some persuading, though. Call centres are an excellent generator of VAT, ie they are not only a waste of time but also are a stealth tax. They also provide another benefit in that they employ people who would in many cases be otherwise unemployable, and thus keep them off benefits.

5 June 2015

With regards to large corporation’s attitude to customers, Pay Pal appear to be breaking UK marketing laws with their new user agreement that makes it compulsory for users to allow their telephones to be rung at any time, day or night, with Pay Pal or its associates’ marketing messages.

https://www.gov.uk/marketing-advertising-law/direct-marketing

it says

>>>

5. Direct marketing
You must check if customers want to be contacted by fax, phone, post or email, and give them the chance to object.
When you collect customer details, you must get their permission if you want to send them other offers or promotions.
You must also ask for their permission if you want to share their information with another organisation.

<<<

I have emailed
complaint.info@financial-ombudsman.org.uk
and asked them to enforce this law.

In order for them to take action, it may help if many more people resident in the UK send them similar messages.

Gerry says:

That’s not the only law they are breaking. They use the rip-off Customer Service number 08707 307 191 which is in violation of the Consumer Contracts: Information, Cancellation and Additional Payments Regulations which came into force a year ago.

Typical arrogant American company attitude: “We can, because we’re big and nobody will stop us.”

Brian Pastore says:

6 June 2015

I think that the coming together of BT and EE is the joining up of two of the worst companies in this country.I went for BT broadband and twice they sent me letters saying an engineer would come and connect me up and guess what nobody came on both occasions.I decided to go from Orange to EE they sent me a router and a card with directions for signing up on the internet,I tried many times but it did not work.I sent the router back under the 14 day rule and they sent me a bill for £132 pound. I wasn’t going to pay but they crazed me so much I just paid to get rid of them. I am now with Sky broadband and I could not be happier

[Hi Brian, this post has been tweaked so that it aligns with our commenting guidelines. Thanks, mods]

Patrick Steen says:

28 October 2015

wavechange says:

It would be interesting to read the CME’s reasoning about why the takeover was permitted. In my view, both companies already had too great a share of their respective markets.