What does the BT takeover of EE mean for the quad-play market in the UK?

The competition and markets authority (CMA) has today given final approval to the long awaited 12.5 billion pounds take-over of EE by BT. The consolidation of these two key players will inevitably have a major impact on the telecoms sector in the UK, but what will the impact be when it comes to quad-play?


BT is the largest fixed line provider in the UK, with 31% of the broadband market and 38% of the fixed phone line market. With the addition of the EE customer base, they will soon have 33% of the mobile market to boot. There is no doubt that this deal will put them in an extremely strong position when it comes to offering quad-play packages to their 35 million strong customer base, but this doesn’t necessarily mean that everyone else is out of the picture. There are a number of other considerations which will inevitably impact the quad-play landscape:


The future of BT Openreach is still unclear

The BT Openreach division runs the most popular high speed broadband network in the UK. The future of Openreach, however, is not yet set in stone. Ofcom has till the end of February to decide whether BT can keep hold of Openreach, or will be forced to transfer it out. If the latter occurs, BT’s quad-play offering will suddenly take a big hit. They will retain a strong position with mobile, fixed phone line, and TV, however with fixed-phone line uptake on the decline and broadband uptake on the rise, high speed broadband is more important than it ever has been, and is a key selling point for quad-play packages.


The Hutchinson (Three) and O2 deal could still be on the cards

Lets not forget that the potential buy out of O2 by Hutchinson (Three) is still under review by the European Commission. Now that the BT and EE deal has been approved, it is unlikely that this deal will now be rejected. This will put Hutchinson in a strong position, with approximately 40% of the mobile market and a much larger network. This, combined with the existing partnership between O2 and Sky will leave Hutchinson well positioned when it comes to their quad-play offerings into the marketplace. And this isn’t the only deal to keep an eye on; although talks between Vodafone and Liberty Global were aborted mid-2015, both companies have said the door remains open to deal talks in 2016.


Time to market is important

Although the UK is a little way behind some other areas of Europe when it comes to quad-play, it certainly isn’t a new offering. Virgin Media and Talk Talk have already established their quad-play offerings and have seen some success. It will take a considerable amount of time for BT and EE to successfully transition all of their systems (network management / billing / customer call centres etc.) into one end-to-end solution to provide their customers with a smooth service. This will give the existing operators time to monitor and improve their quad-play packages in an attempt to keep market share prior to the new giant entering the quad-play space.


There is no denying that BT will hold a forceful position in the UK communications marketplace; the combination of the largest fixed line and the largest mobile businesses cannot be taken lightly. However, this doesn’t spell the end for other operators when it comes to quad-play, in fact it may well make the marketplace that extra bit competitive for consumers.