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BT/EE merger could make it 'much harder' for quad play customers to switch

Tuesday, August 11th 2015 by Ellen Branagh

A merger between BT and EE could lead to more “complex and lengthy” quad play contracts, making it harder for consumers to switch, according to the owners of Carphone Warehouse.

Dixons Carphone said ‘indirect’ sellers like itself would be “vital” in helping customers understand different packages and making sure prices stay competitive.

In a submission to the Competition and Markets Authority (CMA), Dixons Carphone said a merger should not lead to any incentive to remove BT/EE products from ‘indirect channels’.

The CMA is carrying out an in-depth probe into a takeover of EE by BT, a move which would see the merged company offering broadband, phone, TV and mobile services – known as quad play.

Giving its own submission on the issue, Dixons Carphone used the opportunity to champion the role of ‘indirect retailers’ such as Carphone Warehouse.

It said consumers often need face-to-face advice to find the right plan or tariff, and indirect channels also improve competition between operators by allowing customers to compare.

“Without the indirect channel, consumers would find it harder to select the most appropriate package to suit their needs, and competition in the market would be reduced,” it said.

The company’s submission said a BT/EE merger fits with a predicted increase in demand for ‘multiplay bundled services’, and customers could benefit from lower prices and improved network experience.

'Less choice'

But it also said: “Consumers may have less choice and ease of comparison across networks and tariffs if BT/EE move from a combined direct/indirect channel strategy to a ‘direct’ only channel strategy.”

A move to ‘direct’ channels might mean that customers cannot benefit from impartial experts, it added.

“The BT/EE merger could drive the uptake of complex and lengthy quad play contracts, making it much harder for consumers to switch providers when their contract ends.

“Quad play providers may offer contracts that are heavily discounted for the first few months to attract customers, creating high barriers to entry for smaller non-quad play providers (eg MVNOs [Mobile Virtual Network Operators]) and thereby reducing the choice of tariffs and brands available to the consumer.

“We believe it is important to ensure that the BT/EE merger does not result in the creation of any incentive to remove BT/EE products from indirect channels, to ensure that consumers remain able to benefit from mobile choice and comparison (including in respect of products from the largest fixed and mobile telecoms operator, which BT/EE would create).

“This will be particularly important as BT/EE will be selling complex quad play bundles and therefore the indirect channel will be vital in helping customers understand these offerings and ensuring that pricing remains competitive.”

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