Rivals fuming as BT's £12.5bn mega-merger with EE is waved through

Vodafone and TalkTalk said they were 'disappointed' and 'concerned' with the ruling

BT won a decisive victory in the battle to force its way into the mobile phone market as its £12.5bn mega-merger with EE was waved through by the competition watchdog.

Rivals were furious with the decision, having pushed hard for parts of BT to be sold off if the deal was to go ahead.

The Competition and Markets Authority (CMA) said BT could keep its portfolio of businesses, as the deal was “not expected to result in a substantial lessening of competition in any market in the UK”. BT shares jumped nearly 4 per cent to 468.65p on the news.

Vodafone and TalkTalk said they were “disappointed” and “concerned” with the ruling, in particular that BT was not forced to sell Openreach, which leases fixed phone lines to the mobile operators.

The CMA pointed out that its role was to make sure customers were not affected by a lessening of competition. It said: “We have… been mindful that the role of the CMA in merger cases is to protect competition for the benefit of consumers, not the commercial interests of competitors.”

BT will use the ruling to push through plans to tap into the so-called “quad play” market, offering fixed line, broadband, TV and mobile phone bundles to households.

Rivals reacted with anger. A Vodafone spokesman said: “We strongly believe the combination of the UK’s dominant supplier of digital fixed infrastructure – upon which all other providers rely– with the largest mobile operator would have a negative impact on the market.”

TalkTalk said: “We note the CMA is divided over its findings in wholesale mobile and we will be studying these, alongside the full findings, before reporting back to the regulator in due course.”

The CMA looked into the impact of Openreach and said it was a matter for the communications regulator Ofcom, pointing out that a review of the structure of the industry was already under way.

It added: “We have been mindful that our assessment in this inquiry is of the impact of the proposed merger, not an investigation into the industry or into the effectiveness of current regulation.

“We noted that Openreach is subject to regulation overseen by Ofcom which is designed to prevent such discrimination. We found no evidence to support third-party concerns that BT had, in the past, circumvented this regulation.”

Other concerns raised included fears that EE could stop providing its wholesale service to rivals. It already allows Virgin Media to use its network as Virgin Mobile.

But again, the CMA pointed out that even if EE were to stop offering its service, there were three other national mobile operators that could fill the void – although this could become two with the proposed merger of O2 and Three.