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UK broadband provider BT is to be a mobile network once again.
The company’s £12.5 billion acquisition of mobile network EE was approved by the UK’s Competitions and Markets Authority on Friday, and BT expects to close the deal by the end of the month.
If you’re a BT customer, its acquisition of EE means you’ll likely see new package deals that combine broadband, TV, mobile phone and landline phone service. These multiplay packages are growing in popularity, with CCS Insight predicting that by 2019 eight in 10 UK households will have signed up to one. By incorporating mobile into its packages, BT is effectively giving itself the best possible chance of appealing to consumers looking for a multiplay bundle.
The decision says that merging the two companies won’t hurt healthy competition in either the broadband industry or the mobile industry. For consumers, that means they will still have four main mobile networks in the UK to choose from and that prices should stay affordable and competitive between the different networks.
“The combined BT and EE will be a digital champion for the UK,” BT Chief Executive Gavin Patterson said in a statement. “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.”
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BT will seek to replace the EE name, said principal analyst Kester Mann of research company CCS Insight in a statement. But BT would be unwise to rush into this too soon, he added. “The EE brand has benefited from strong investment to become synonymous with widespread 4G coverage.”
The EE network was formed in 2010 by a merger of the UK branches of Orange and T-Mobile, and was the first UK operator to offer 4G LTE in 2012. Since then it has consistently been named the best mobile service provider by Rootmetrics across all categories, although it is also the most expensive.
BT’s challenge now, Mann said, will be to associate its own brand name with mobile and with the success of EE. In the early days of mobile phones, BT had its own network, BT Cellnet, which it spun off and which later became O2. Since then, BT has not been associated with mobile at all.
“BT’s lack of retail presence is its Achilles heel,” Mann said, adding that a sensible approach could be to first offer BT products and services in selected EE stores. “This could give it a major boost as the UK market inexorably evolves towards multiplay.”
