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By | Kelly Fiveash 9th June 2015 11:37

Competition risk? BT faces rigorous frisking over £12.5bn EE takeover bid

UK watchdog frets about threat to mobile market

The UK's competition watchdog has agreed to hasten a probe into BT's planned multi-billion pound merger with EE.

Last month, the one-time state monopoly urged Blighty's Competitions and Markets Authority to swiftly move on from the first phase of its inquiry into BT's bid to slurp up the mobile operator.

The regulator said in a statement today:

For a case to be fast-tracked, the CMA must have evidence that it believes objectively justifies a belief that the test for reference to phase 2 is met.

The CMA has found that the transaction meets the test for reference in that it gives rise to a realistic prospect of a substantial lessening of competition in relation to the supply of wholesale access and call origination services to mobile virtual network operators and fibre mobile backhaul services to mobile network operators in the UK.

It has therefore decided that it is appropriate to proceed with a fast track reference of the merger to phase 2.

The CMA added that, although "competition concerns" had already been raised about the impact the proposed merger could have on the UK's retail mobile market, it was yet to reach a conclusion in response to those gripes.

It said that third parties could flag up their misgivings about BT's planned merger with EE during the phase 2 investigation. Both companies provide wholesale services to rival telcos in the UK.

"We have found that there is a real risk that the merger could reduce their incentives to supply these inputs and that this could have a detrimental impact on the retail mobile market," said CMA markets and mergers' exec director and case decision-maker Andrea Coscelli.

BT has previously said that it didn't expect its proposed gobble of EE to be completed until March 2016, assuming – that is – that meddling watchdogs wave the merger through. ®

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