Gavin Patterson, CEO, BT Group Patterson… on why it will boost investment
‘BT has shown from its huge investment in fibre broadband that progress doesn’t need to be at the cost of competition. Hundreds of companies use our network on equal terms and they will continue to do so in the future. We are happy for them to stand on our shoulders.
‘As we know, the UK has made some huge steps forward in the past few years thanks to BT’s investment in fibre and EE in 4G. Further investment is required, however, if the UK is to stay ahead. An appetite for investment and innovation is essential. BT and EE have such an appetite. BT, for example, invested in fibre when other companies said customers didn’t want it. If we’d listened to those companies the UK would be at the bottom of the fibre league. Thankfully we didn’t, and the UK is now thriving.
‘The challenge now is to deliver the seamless and frictionless service that customers are demanding. This deal will allow us do that, giving customers access to the internet however, whenever and wherever they want, and at whatever speed they need.’
Patterson… on the effect on competition
‘This deal will not be at the expense of competition, despite what others may have told you. There are three factual points I’d like to make; first of all, this deal will not reduce the number of fixed line or mobile operators in the UK. Second, other companies will still be able to access broadband services from Openreach and MVNO services from EE. And third, the UK will have a third of some of the most intensely competitive retail broadband and mobile markets. This is in stark contrast to most other countries where the incumbent has a far larger market share.
‘The UK is renowned for its competitive market, thanks to the Openreach model, and I’m sure that it will stay that way in the future. Ofcom cuts a fine balance between encouraging investment and competition, and our proposed deal will not upset the balance.’
Patterson… on the impact on pricing
‘What is clear is that you have more scope to offer value to customers, the more products you’re able to serve them. If you look at the trends that have happened in the fixed broadband market over the past few years there is clear evidence, which demonstrates that.
It’s a very competitive marketthat has created the lowest prices in Europe, the widest choice in Europe, but that has also driven innovation and investment. It’s a virtuous circle that is very good for consumers and very good for the UK as a whole. So I don’t see anything fundamentally changing. The appetite for data is insatiable – in order to support that data growth you need to invest in the network. You need to bring different technologies into play to drive efficiency. And that’s why this makes sense.
Patterson… on why the UK needs to follow or risk falling behind
‘This isn’t revolutionary, if you look around the world this has happened virtually everywhere else. I’m not ashamed of that in any way. We’re followers here and we need to catch up if we are able, to maintain this level of investment.
‘This is a four mobile operators before, four mobile operators after. This is a convergence of fixed and mobile players. If you look at these types of deals across Europe there’s evidence that prices came down. Some of it was invested back in value.’
Patterson… on the CMA’s investigation
‘The counter factual that the CMA have to measure against has to be a very conservative one, in order for it to be approved at phase one – it has to see no lessening of competition against the most conservative outlook that it can find, which of course would have Hutchison Whampoa buying O2 with no remedies.
'To get phase one approval the CMA would have to say: this is fine in that context. Clearly, that wasn’t going to happen, so that’s why it couldn’t send it through on phase one. But I welcome phase two on an accelerated basis – I think that it will give it the opportunity to do the thorough analysis of the market.’
Olaf Swantee, CEO, EE Swantee… says Orange and T-Mobile proves it can work
‘Consolidation has proven that it can unlock investment – just four years ago Orange and T-Mobile received approval from the European Authorities and Ofcom to come together - that started an investment wave in the UK. We invested £1.5bn and made the UK a leader in a very short time. You may remember that Angola and Azerbaijan were countries that had 4G and the UK did not. Today the UK has the fastest speeds in Europe and we are ahead of the US.’
Swantee… on why it’s needed for 5G
‘With 5G we expect the standards to be out in the market in 2019. What we do know is that high investment will be required; all the equipment will need to be upgraded. It will require small cells, it will require spectrum, airwaves and it is very important that the UK will not be one of the later countries but one of the first to implement 5G.
'The benefits for consumers and for businesses are very clear – when you think about consumer benefits you see that around the world where consumers are able to buy a combination of two and three or more products those customers tend to stay longer with those providers. That benefit of revenue and profit can then be shared with the customer in terms of value.
'There are savings of up to 40% for customers that purchase more than one product from the same supplier. In the case of B2B that is even higher – from companies that don’t have a big IT department we are hearing more and more that they need to have one services partner for both mobile and fixed products.’