BT's £12.5 billion EE merger gets green light as rivals warn of price rises

The £12.5 billion takeover by BT of mobile giant EE has finally been given clearance by regulators but rivals immediately warned that the deal could lead to prices rising by as much as a quarter.

The Competition and Markets Authority unanimously cleared the deal, which was first revealed 14 months ago, saying that it had found no evidence that it would result in a “substantial lessening of competition.”

But rivals claim that along with Three’s £10.25 billion takeover of O2 there will be a significant loss of competition in the UK mobile market.

The EU is due to rule on that merger by March.

Dido Harding, chief executive of TalkTalk, said: “A move from four to three mobile operators in this country will be bad for customers and will — as we have seen in countries such as Austria and Ireland where it has happened — lead to price rises of 25% or more.”

She added: “Ofcom’s Sharon White has made it clear that she believes it is competition which drives down prices not consolidation.”

Ofcom is currently investigating another huge aspect of BT — what the future structure of its network business Openreach should be.

Rivals have been crying for it to be split out of the telecoms giant.

Vodafone today said: “We believe it is imperative that the wider market concerns relating to BT Openreach raised by a number of parties and recognised by the CMA, need to be thoroughly scrutinised by Ofcom in its Digital Communications Review.”

Gavin Patterson, chief executive of BT said: “The combined BT and EE will be a digital champion for the UK, providing high levels of investment and driving innovation in a highly competitive market.

“I have no doubt that consumers, businesses and communities will benefit as we combine the power of fibre broadband with the convenience of leading-edge mobile services.”

The deal will see EE’s joint owners become significant shareholders in BT.