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Update: BT buys EE – are mergers good news for customers?

BT and EE merger

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.’


Most large corporations exist to make a maximum return for their shareholders and it would seem to pay obscene salaries to their management. They don’t care one jot about customers (or staff, come to that) until their lack of service, quality or affordability starts to hurt “shareholder value”. This is called capitalism and without some form of regulation (and accompanying penalties) there is no incentive for any company to do other than squeeze their customers and the market. The bigger the company the more bureaucratic; inefficient and uncaring it becomes (in my long experience of consulting to the corporate sector).

Likewise big companies care only about big profits, so investing in areas where there is a marginal return (e.g. rural mobile signal) is never going to be on their radar – and so it is here in Somerset. A mobile signal indoors is something to fantasize about and more than one bar out of doors is an occurrence worthy of celebration.

Our family abandoned EE broadband and mobile because of its appalling service, dishonesty & sales trickery and lack of value for money. For broadband we went to BT (mobile to Tesco) and the quality and value for money is better – although (fortunately it would seem) we haven’t needed BT’s customer service.

However BT & EE are bottom of the league for customer service and it’s a frightening prospect that these two should be combining their services, with the possibility that when you need service you will be faced with the worst that the industry has to offer.

Finally, fewer suppliers = less competition = higher prices and lower service quality. We need more competition.

To some extent I have to argue about customer service. With my mobile I am with Vodafone (who outsource customer service to the Philippines – and they are clearly tutored not to give an inch and are extremely rude. This has not been my experience with all outsourced services in the Philippines.

Provided you are not daft enough to stick to the ‘easily obtainable’ BT service numbers and find one that takes you to the UK and more expert departments you will find them extremely helpful. Unfortunately when it comes to getting an engineer (despite claims on BT Service guarantees) will often take weeks – and then even months if you ever get to resolve you issues at all (our line problem has been known about for over a year) and then you take pot luck if you get an indifferent or a good engineer. We have a handful of engineers serving a large area where we are often working under awful stress (no I am not a BT engineer) 🙂

But yes I agree we really need more competition and total unbundling of exchanges. While remembering ‘more’ does not always mean better. Our problems go deeper than ‘customer service’ – we need more and better trained engineers along with enforced infrastructure improvement – all this needs to happen simultaneously or we are never truly going to move forward with broadband provision. Additionally f prices were more uniform across the UK we would also not have the problem of rural areas being merely patched up/left to degrade.

I agree and I am in Somerset near Wincanton and cannot get any signal in the house and only intermittent ones (2g) if lucky 30 metres from the house

I tend to agree with you. We are constantly being told by the over wealthy elite in Government, media and Business how wonderful private businesses are in relation to being publicly owned. 1) With the right Manageras and accountability and business plan – there is absolutely no reason why publicly owned (nationalised) businesses should not be profitable and successful. (After my years of experience in a public corporation essential to the business & social needs of the community). 2) We are advised that when a major public service/part of essential infrastructure is sold off – we will have more competition, driving up value for money, efficiency and lower prices, etc., etc. But what has been the reality? Abysmal performances from many in the top percentile of lack lustre managers. yet they are taking conglaturatory super salaries, bonuses & perks from the wealth we ALL strive to create.. Even when finally found to be failing badly – they go with massive golden hand shakes! Ludicrous shambolic capitalism at it’s worse. 3) We are then advised to employ similar people at the top in the few and most important remaining publuic services or at the head of the many Quango’s, etc., and what do we find? Similar problems, hundreds of patients in NHS Hospitals dying or put at risk through lack of skilled and timely decision making etc. 4) Finally the supposed benefits of privately run large industries and businesses – frequently rising prices bearing no real relation to supplier market movements, major accidents caused by laxical business control, estimations on major projects frequently anything from 25% upward underestimated, some even 100% under! An increasing reduction to a small core of giant players – often now under foreign financial control, creating a risky future. Poorer customer servicing – managers hiding from their customers and employing outsiders of little or no experience of the business they are procurred to represent. We now cannot take back and re-nationalise our essential infrastructure businesses, because the National Debt stands at £1.3 trilliohn and rising all the time so the costs are beyond even a pipe dream.. So what hope of us getting truly fair deals (not designed to fleece us) from any of the reducing numbers of communications suppliers? They can carry on just as they are, who will stop them? The current profitable playing fields are fibre optic telecomms connections (a technology developed by Post Office Telecomms way back the last century!) and “4G” radio phone transmissioning and boy are they being milked! I tire of all their silly marketing games and put up with cheaper lower performing standards, while they last …I cannot believe that Which or anyone else is going to get me a much better deal at a truly affordable and woirthwhile cost.

The reason why problems are so difficult to resolve is that BT is run by lawyer-accountancy principles, not engineering principles. It make business sense to have a centrally controlled customer queuing system to resolve faults, but it is almost impossible for engineers to cure intermittent faults this way.

For example, the fault may only occur when it is raining. To find it easily, the engineer has to attend when it is raining, not when his work sheet says he should. It is a matter of luck whether the engineer attends on a showery day and can actually observe the fault and measure the line to find it. As BTOR is (and has to be) a monopoly there are no comparisons with different fault repair systems that can be made. For intermittent faults, I would recommend assigning one engineer to a particular fault and giving the customer his mobile number so that they can communicate on a more direct basis and make appropriate arrangements. (In my example, for the engineer to attend on a showery day.)

Florriebunda says:
9 February 2015

Re our first point – public versus private service provider. I agree in principle but having lived through the time when nationalization was common I’d like to ask where are the staff and managers who could provide better services? They are the same people we have now surely unless someone invents super people. For myself having experienced the misery of British Rail’s shocking service in the past I much prefer the system now – despite it’s flaws and problems Believe me they are nothing compared to the nationalised system when most staff didn’t care about customers, service or punctuality. And no I am not a Tory . I was always a Socialist until I first saw Mr Blair on tv I’m sorry to say it but people are not self motivated They need tough but fair management to give good service as well as expertise of course. And good managers are as common as hen’s teeth.

tonyE1951 says:
6 February 2015

If the sale goes ahead then BT will dwarft all other competitors and effectively stiffle competition. It may be that BT will have to sell part of it’s empire as a condition of the sale to avoid becomming so dominant. I certainly don’t think customers will benefit from price reductions and have concerns about EE dragging BT’s customer service even lower. Expect a huge amount of objections from Sky, Virgin etc. The main (financial) beneficiaries of the sales process which no doubt will drag on for about 18 months will be the legal teams involved. Call me a cynic if you like but if the sale does go ahead customer service will not improve, the services provided will not improve, there will be no price reductions for customers, BT employees will be paid the same or less for doing more but board members will some how receive hughe increases in their salaries, share options, pensions etc. Then when it all falls apart in a few years because BT becomes too unwieldly to manage someone will have the bright idea of selling part of the operation.

I left both BT and Orange because of their high prices and poor customer service. So these two aren’t a match made in heaven, neither can improve the other when they suffer the same from the same problems.

I agree with stubbles BT are terrible at customer services I tried them when they first started broadband and left after 2 years vowing never to return Sadly 5 years later I was persuaded to give them another chance OH what a fool I was, another 12 month of purgatory tied to a contract that was costing me twice as much as they originally said and threatening letters I had to go to the regulator who agreed and BT backed off I still got letters for 6 months after but could ignore the threats etc
If this merger goes ahead we will all be at the mercy of 2 giants and possibly find any complaints about one product bringing on a ban from all their services
We don’t need media dictatorships in the UK

I agree with the comments about BT, both my daughter and myself were BT, I was just on for phone, but she was on for phone and broadband ~ prices higher than anywhere else, customer service non- existent and in fact the helpline were staffed by very rude people. When I complained about a fault it took 3 or 4 phone calls to get to an engineer, engineer was supposed to come but didn’t. Eventually I changed to Sky: then the BT engineer called and said they had been looking for the fault, but could not find one, till he came here and then he pointed to my nearly severed line just outside the front door and said ‘that is your problem’. I was so angry because I had swept the leaves away only the day before and it was perfectly alright, so I shouted at him, ‘you did that’. I guess I really frightened him because he stuttered a bit and then said suit yourself and disappeared. I was shaking with anger, but fortunately Sky did not take so long to come and I was happy then. I have had Sky T.V., Broadband and Telephone for a good few years now and I am very happy with them. They do answer the phones, although they are busy during the day, but evenings are fine with me. The are friendly, helpful, always ring back when they say they will, or soon after, and I have no complaints. They are not as expensive as BT, but even if they were dearer I would not swap.

I’d love to know why somebody gave this a thumbs down ?

Florriebunda says:
9 February 2015

Probably the engineer who probably cut the line ??

Hi all, thanks for sharing all your comments so far about this matter – all the feedback you’ve provided is really appreciated.

Brian says:
6 February 2015

I am currently experiencing the pathetic attempt by EE at resolving what should be a simple account set up procedure I shudder to think what base level of service we all will get when EE and BT join !!!

Customer service is one of the biggest issues in business today. The bigger the company, the rose the customer service seems to become. Outsourcing to offshore call centres features high on my list of bête noires. Another pet hate is the “follow the computer screen” attitude of most call centre staff. No common sense, no willingness to get a senior member of staff involved for more complex queries that the screen doesn’t cater for. I think this is because they are targeted on “time call length”. If their call answering level drops too low, they are in trouble.

If there are too few companies offering similar services the impetus to be more competitive in terms if price and also customer satisfaction levels, tends to drop significantly. I have been fighting the customer service battle for years. I complain very loudly if I feel I have been given poor service. I keep complaining until I get satisfaction.

On balance I think that smaller companies, and more of them, results in better customer service and usually better value pricing. I guess it’s the basic law of economics…. Competition is good, monopoly is bad!

Why can we not have a separate company providing a fixed price line rental
Then you can chose who you get your services from. Then you can have broadband from one and phone calls from another if you wish!
We do it with electricity no matter where you buy it comes down same wire

In rural areas providers don’t see enough custom to make it worth their while. In unbundled exchanges providers have to install and maintain their own equipment (oh sorry I mean hire BT’s Openreach engineers). Not enough fully trained engineers. Not enough forward thinking.

Andrew Barker says:
7 February 2015

Thanks to BT,a recent house move brought me to the verge of a nervous breakdown ( and I am not easily spooked).
Utter incompetence. Unintelligible phone handlers. Broken promises.Lies when I was given a dedicated phone number and a pin number to use guaranteeing me a UK contact .Did it work?
Of course not.
Interestingly, I asked several friends which company they thought had been the cause of the most problems during our move. Everyone single one said BT..
How on earth they will cope with such a massive takeover?

I might not be brilliant at accounts but according to the end of 2014 financial year, BT had £695m cash at bank and in hand, £248bn assets and £254bn in liabilities. It has now bought EE for £12.5bn. To my mind, they could not afford to buy EE.

With Three buying O2 as well, there will be job losses at both companies.

It never ceases to amaze me how companies can take over other companies often on huge sums of borrowed money. With many countries 10s of billions in debt, where does all this money come from?

Just seems to me, that the government should be doing a lot more to stop big companies swallowing little companies and stamping out their rivals, buying companies and loading them with debt, stop our industries going abroad…..

They need to start protecting jobs and competition for this country.

I suppose BT is securing loans on future revenues – made even more potentially lucrative by the elimination of another competitor.

N Naylor says:
7 February 2015

The motive behind these mergers and takeovers is nothing to do with benefits for customers, who are the money trees ripe for picking. Does anyone really buy the idea that the enormous increases in BT’s line rental in recent times, can be justified by the rising costs of maintenance?

It appears to me that as we allow businesses the freedom to grow ever larger, their behaviour becomes more monopolistic towards their customers. One raises it’s prices and the remaining few competitors can follow suit without altering the status quo in terms of competition between them. Father Christmas puts more money into all of their stockings.

What I would like for Christmas is the comfort of knowing that any increases in the prices charged for services to large communities of consumers, are thoroughly examined and challenged, and that the ‘auditors’ are free from the undoubted pressures of ‘big business’ acting through the Government. Why hasn’t BT’s line rental hike been challenged? Some ISP’s offer a very large discount for an annual payment, the cost to the provider being several times greater than the going rate of interest the latter can realise wherever the money is invested. Could it possibly be that the rental increase covers the discount on annual payments to ISPs, their payments to BT remaining unaltered and BT collecting the higher monthly rental payments from its own customers?

We should not be placing greater power, the result of the proposed acquisitions, in the hands of a very small number of providers who will undoubtedly exercise it at the unreasonable expense of consumers.

Linda Ridgley says:
7 February 2015

I have had the misfortune to switch to BT (as Virgin was abandoning its non-cable customers) and have had appalling service from them. Briefly – it took two weeks for them to get me an email address (Asian Call Centre which took me through the same script which failed to register an email for me – then a promise someone would call back in 48hrs – they didn’t). Their website is strangely silent on how to escalate a problem. Eventually I did get the promised email but now it blocks my outgoing emails – seemingly arbitrarily – cutting me off from my friends and relations. I dread having to go through the struggle to get this resolved again. BT is so big and so bloated that it has forgotten that it is a SERVICE and reliant on its customers sticking with it. The fewer options we have as alternative providers the less it will invest in Customer Service. This cannot go on. BT was very canny when it was privatised and managed to keep out other providers for years because it was still in charge of the infrastructure. Government must nationalise this infrastructure and licence its use to other providers at cost to reduce the stranglehold BT was gifted. This would allow other providers to come in and be less disadvantaged. It might give the customer some strength and “encourage” BT to put them and not its shareholders first.

Sybilmarie says:
7 February 2015

Nothing to do with BT is a good thing.

I still have an old 1990s Nokia phone that identifies the O2 network as BT Cellnet. Remember when BT used to own the network that, through various takeovers, has now come to be called O2? Now, bizarrely, it will own one of its competitors.

P.J.Coyle says:
7 February 2015

This bt take over of ee orange is an outrage and which magazine should not be taking this arm length head in the sands approach .

Anyone with half a brain can see what an obnoxious bunch all of the cell phone operations . We have had 2o yrs of non stop complaints from millions of customers via the national press of there sharp practise and dirty dealings with their own customers …..the above statement by vanessa furey is pitifull where have you been this last 20 yrs …. “we think the competition authorities should take a look at”
Which is truly loosing it all to political correctness wake up to the fact that there is no monopolies commission …competition authority commission if there was we would not have the takeover by kraft of cadburys and a hundred other uk mergers alone never mind the world wide mega mergers that has destroyed millions of jobs across the globe.

What a sad pitiful and mealy-mouthed position whi ch has arrived at in2015

[This post has been edited because it was written fully in upper case – Thanks, mods]

I am not technological and my limited experience of BT and EE customer services has been more or less unsatisfactory so I’m inclined to support what members have said here. What I would like to hear is suggestions of what I can do. If I cancel my subscription to EE now what should I do next?

BT are clearly out to monpolise the whole mobile phone market. This is probably necessary because their market position has been weakened over recent years. If they can achieve the dominant position then they can dictate the terms.

As an example of what’s going on in the background between the communications giants I found the following Daily Telegraph piece illuminating [this is my summary of the article: I will submit the link separately]:

Cable operator Virgin Media has urged rivals to raise their broadband prices, arguing that consumers should pay more to fund investment in internet infrastructure. It made the appeal at an industry conference at BT headquarters. Sky has slashed broadband charges to compete with BT and now offers up to a year free in response to BT’s attack on its pay-TV stronghold. TalkTalk also offers up to 18 months free. Virgin Media owns its own cable network and positions itself as a premium broadband provider with faster speeds than are available via the BT network. It charges £12 per month for its slowest package, rising after to £17.50 after a year. Virgin are quoted as saying rivals should charge, too and that it was “paradoxical and ironic that this is the sector where we’re promoting and advertising the notion of free broadband access. It’s creating an impression in our consumers’ minds . . . that broadband should be free. Broadband is an essential foundation to growing the economy in the UK. It requires investment and sustained commitment.”

It’s worth reading the full article to appreciate how the big beasts behave.

” Unbelievably, people trust banks more than they trust mobile firms”
I had to laugh at this in the article. If we trusted Banks any less than mobile firms we would all be carrying around cash. : )

dieseltaylor, I’ve been with Nationwide now for very many years and I trust them – I’ve never had occasion to do otherwise. Investment banks – a different kettle of fish.

The first time the conduct of banks concerned me was when they denied that phantom withdrawals from cash dispensers were possible. That seemed an unreasonable claim at the time and it proved to be wrong.

My main personal grievance has been when banks have decreased interest payed on savings accounts while launching a new account with substantially higher interest.

Recently we have seen some big fines for RBS, HSBC and Barclays. I recall that Barclays put aside £500 million to cover fines and their shares rose when this announced.

As I see it, the mobile phone companies are more in the petty crime league, for example adding a bit to the cost of monthly payments for phone contracts, though some have been hit badly with unexpected charges.

My only personal grievance was when T-Mobile took over from One2One and doubled the call charge from 10 to 20p per minute, peanuts compared with the loss of savings income from banks.

I do trust the mobile phone sector more than the banking sector. Last time I checked Which? Consumer Insight, that was the majority view.

Malcolm r – I have worked for three clearing banks for a considerable time. The customer ethos was hugely stronger then than it is now, and the staff were better trained. Branches could resolve most problems at the counter or by telephone to your branch.

Certainly never perfect but much more responsive to local opinion as they competed for customers in each town.

Both BT and EE have appalling customer service. If the merger improves that, it will be very good. Otherwise horrible thought.

Richard baker says:
12 March 2015

God help us all
Anything b.t. Or British gas is a rip off