BT's ambition to buy mobile giant EE could face crackdown by regulators

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BT could face a series of crackdowns by regulators in its pursuit of becoming the Britain’s biggest telecoms provider.

The company may be forced to sell some of its customer accounts, its airwaves or even its networks in order to proceed with a £12.5billion deal to buy mobile giant EE, analysts warned.

It is already the largest single provider of landline phones with 40 per cent of the market and home internet with 31 per cent.

Rules: BT may be forced to sell some of its customer accounts, its airwaves or networks in order to buy EE

A tie-up with EE, which has a third of the mobile market, would make it number one in mobile too. Rating Agency Fitch said BT’s deal would give it ‘significant scale’ and could lead to ‘changes to business models and industry structure’.

The move is likely to spark a wave of consolidation deals as rivals team up to try and compete in all four areas of phone, TV, mobile and internet. The Competition and Markets Authority, Britain’s takeover watchdog, has already been contacted by industry figures urging it to curb BT’s dominance, it is understood.

Analyst Tom Gidley-Kitchin at Charles Stanley said a probe could take six months, but that he expected the deal to be cleared. He added: ‘It is likely that regulators will insist that BT makes some or all of these services separately available to others at a reasonable price.

‘It is also possible that BT will be forced to demerge with Openreach, which owns and maintains the “last mile” to homes and most businesses, or possibly even its core network, so that these are operated on an actual standalone basis rather than an artificial one.’

He said the combined BT (up 7.4p at 405.4p) would be ‘in a very strong position in the UK market’ and would take mobile customers from O2, broadband customers from TalkTalk and even TV subscribers from arch-rival Sky. 

BT’s rivals have long argued that Openreach rigs prices in favour of BT’s own services. A BT spokesman said: ‘BT is one of the most heavily regulated telecoms companies in Europe with hundreds of companies using its network to reach their customers. This has created an intensely competitive marketplace in which BT has a very low market share compared with its European peers.’