BT and EE CEOs push case for merger

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Gavin Patterson and Olaf Swantee making first public appearance together to update media on proposed deal 

BT and EE have held a press conference in London to push the case for the telecoms provider’s £12.5 billion acquisition of the mobile operator.

Mobile News and national media were in attendance at the BT Tower for what was the first public appearance together by BT CEO Gavin Patterson and EE CEO Olaf Swantee.

A report from the two companies revealed at the press conference claim they have invested £35 billion in the UK in the past decade.

During the event Patterson said that the acquisition will create a ‘true digital champion’ that will benefit UK consumers and businesses. His comments were echoed by Swantee.

They claim that the UK needs a “digital champion” to invest in ultrafast broadband and 5G, or risk the UK falling behind other operators in Europe and the US. BT_Tower-1-web

Swantee said: “A world-leading, combined fixed and mobile, digital infrastructure will sit at the heart of a successful UK economy. The success of the UK in the future will be built on its ability to deliver real-time, data-heavy information through leading edge network technology. Bringing BT and EE together makes that possible.”

Amidst concerns that a combined BT/EE would lead to a decrease in competition, Swantee pointed to EE as an example of where consolidation had not led to an increase in prices.

The UK’s biggest mobile operator was formed in 2010 from a combination of Orange and T-Mobile that reduced the number of operators active in the UK from five to four.

Swantee added: “The merger of Orange and T-Mobile started a wave of consolidation but prices didn’t rise when EE was formed so why should they now?

“Its important to stay ahead and that takes investment. Benefits to consumers and businesses are clear. Multi bundles reduce churn & that extra money can be passed on.” DSC08256

Communications Chambers

Patterson also sought to placate fears over BT being too dominant a player by saying that other companies would be able to compete through equal access to BT’s fibre network via Openreach and wholesale access to EE’s network.

“Progress doesn’t need to be at the cost of competition. BT has shown that and so has EE,” the BT CEO said.

“The UK is the best of the big European five countries (UK, Germany, France, Italy and Spain) for broadband and has  the fastest 4G. The challenge now is to deliver the seamless and ubiquitous service people deserve.

“Data demand is always growing. The best way for us to tackle this is by investing further and this combination will let us do that.” DSC08266

BT has commissioned and ‘independent report’ by Communications Chambers about how the combined company will be well placed to address five key trends “at a time of declining revenues in the (telecoms) industry”.

They are:

  • Increasing demand for data and speed in fixed and mobile network
  • Expectations of ubiquitous, seamless and reliable connectivity
  • Pressure on enterprises and the public sector to enhance productivity through digitisation
  • The proliferation of devices and the Internet of Things placing additional demands on critical networks
  • Rapid change and rising uncertainty in the telecoms industry

The reports author Rob Kenny said there were three main benefits to approving the deal, starting with the fact that BT buying EE will make the UK its home country, with a single owner, allowing it to be more fleet-footed when making decisions. Currently EE is owned 50/50 by Deutsche Telekom and Orange.

He also said the £3 billion synergies that BT expects to find on completion of the deal would allow it to invest further and give more value to end-users.

Finally, the combination would allow it to deploy hybrid solutions involving Wi-Fi and 4G for calls and data. It would add diversity, bandwidth and quicker provisioning to the service, optimising traffic across fixed and mobile services by reducing the probability of congestion. DSC08271

Kenny said: “Rapid change in telecoms calls for resilience and flexibility. Telecoms companies need to increasingly make bets on new technology, while OTT players are destroying revenues.

“Not all mergers help with innovation, but bringing together complementary technologies tend to make more successful combinations.

I conclude the merger has the potential to generate a wide array of customer benefits driven by enhanced investment, innovation, efficiency and competition for converged services.

“Notwithstanding the merger, the  UK would continue to be a well contested market by comparison to its European peers, with some of the most pro-competitive market interventions globally.”

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