BT and EE to sign takeover but Openreach regulatory decisions still in the air

BT is set to complete the takeover of mobile provider EE on 29 January, in a move that will create the biggest telecom company in the UK. Although the companies jumped the regulatory hurdles needed to sign a deal, several parties are pressing for BT to spin-off its fixed line network division Openreach.

Communications and media regulator Ofcom is still considering whether it should force BT to sell Openreach, while competitors Vodafone and TalkTalk are keen on pushing for a forced sale. Ofcom will publish its findings of the review into Openreach, giving more clarity on the situation for BT.

Regulators have approved the deal so far, arguing that BT's fixed line business has very limited overlap with EE's mobile service. That's why the companies' direct rivals are clinging on to the hope that Ofcom will rule that BT should spin-off Openreach

After the Competition and Markets Authority approved the deal on January 15, BT's chief executive Gavin Patterson said he was pleased the regulator " found there to be no significant lessening of competition following an in-depth investigation lasting more than 10 months".

However, shortly following the CMA clearing, BT was hit by another setback. A report backed by 121 cross-party MPs ruled that BT should be forced to sell Openreach. Not because it would be unfair for the competition, but because of poor performance.

"We believe that Britain should be leading the world in digital innovation," the MPs said in the report. "Yet instead we have a monopoly company clinging to outdated copper technology with no proper long-term plan for the future."

It claimed that 400,000 small and medium businesses do not have access to superfast broadband. BT claimed that 90% of UK premises can access superfast broadband, despite claims made by the MPs that its copper technique does not create fast enough internet.

BT is expected to give more information into its plans with EE along with its third quarter trading update on 1 February.