Proposed merger raises risk of stifling competition, firm says
The proposed merger of BT and EE could have a damaging effect on consumers and the British telecoms industry as a whole, according to high-speed broadband firm CityFibre.
The company has revealed that it submitted a formal complaint to the Competition Markets Authority (CMA) on Friday, requesting that Ofcom be allowed to enforce extra regulatory measures on BT should the acquisition be allowed to proceed in order to deliver a “level playing field.”
CityFibre believes the merger would “stifle innovation” and “deliver little tangible benefit for consumers”.
The CMA had been examining the £12.5bn merger, which was confirmed in February, following calls from some operators and networks – including CityFibre – that the watchdog should look at enforcing BT to split off its existing broadband service Openreach.
A BT spokesman denied today’s claims, telling City AM, “BT is the most heavily regulated telecoms company in the world and there is a level playing field as a result. That won’t change as a result of BT acquiring EE.”
CityFibre operates a number of other FTTP networks across the UK, and most recently announced plans to expand to Peterborough and Edinburgh. The firm is also involved in a joint-venture with Sky and TalkTalk that could eventually provide a rival to the Openreach network in urban areas.
CityFibre also released its yearly financial results today, revealing a 105 percent rise in revenues during 2014 to £3.8m as its pipeline of anticipated projects is larger than anticipated.
However, this was not enough to prevent a pre-tax loss for the period of £7m, an increase from £6.2m in 2013.
The company said that a large part of this increase was due to a near doubling of administration costs, which increased to £11m as staff overheads leapt 32 percent.
CityFibre also saw significant traction during the first quarter of this year, with chief executive Greg Mesch saying, “We have started 2015 well, the business is strongly capitalised and well positioned.”
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