How will the BT and EE merger affect IT departments?


BT announced their intent to acquire EE in 2014, but the Competition and Markets Authority has only recently cleared the proposed £12.5bn bid, which stated that “the merger is not expected to result in a substantial lessening of competition in any market”. This deal will create a telecomms giant that’ll be the biggest service provider in the UK - Ofcom reports that the company will hold BT’s 31% of the fixed-broadband market, a 37.6% share of landline traffic as well as EE’s 33.8% share of the mobile market.

Read on to discover how this merger will affect those working in IT.

The news of the BT-EE merger has been met with a mixed reaction, with most of the negativity coming from BT’s rivals - one of the leading critics is Vodafone CEO Vittorio Colao, who argues the deal will “re-monopolise” the market. Trade associations have also voiced concerns, with the The Internet Telephony Services Providers’ Association claiming that the deal could be “extremely damaging” citing Three’s potential takeover of O2, which would leave the UK with just three major mobile operators.

Although the merger may be daunting for BT’s rivals, they can take solace in that it will likely convince Ofcom, which is conducting an inquiry into competition in the broadband market, to order BT to split from their Openreach broadband service, a move which has been long campaigned for by Sky, Vodafone and TalkTalk and was backed by a government report.

But what does this all mean for IT departments? First off, they should consider their customer service needs. Both EE and BT hold the lowest ranks for customer services in their fields, and BT was forced to apologise after the launch of BT Sport caused complaints to Ofcom to double in the Summer of 2013. If customer support is not something that you need, the merger is unlikely to affect you. If you do not use customer services that much, this merger isn’t likely to affect you - however, if you are an IT manager who heavily relies on it, it is important to bear in mind the companies’ negative ratings, and that the future of their customer support post-merger is unclear.

Another important aspect IT departments should be focussed on is costs, but whether or not the BT-EE takeover will affect communications costs is unclear. In the first instance, simple economies-of-scale could allow the new BT to reduce its operating costs and reduce prices. In the mid-term, landline, broadband and mobile combination packages may offer savings. On the other hand, TalkTalk claims that the BT-EE and Three-O2 mergers could cause all UK telecomms prices to rise by over 25%.

IT managers need to look out for any possible changes to their contracts to ensure they are getting the best deal. In the short term, the most likely outcome is... nothing. No one provider is likely to be seen to raise their prices while customers and the media are paying attention, but time will tell.

It’s unusual to find mobile contracts longer than 24 months, so business’ exposure to immediate price increases is generally limited. Technology leaders should ensure that price increases and notice periods are carefully reviewed in new contracts

In summary, if you use BT, you need to evaluate how important customer services is for your department and carefully review price increases and notice periods in new contracts. If you’re not with BT, keep an eye out for any new deals that crop up after the merger is complete, as you may find that you can get the services you need for less.

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