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What the BT/EE merger means for customers

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06/02/2015
I’m a BT/EE customer. Is the deal a certainty?

I’m a BT/EE customer. Is the deal a certainty?

At present, the takeover still requires approval by the Competition and Markets Authority. However, while some industry figures have expressed doubts over the takeover being accepted in the form currently proposed, representatives of BT are confident.

How will my services be affected?

For the time being, the answer is not at all. In fact, your service will almost certainly remain entirely unchanged until this time next year, at least.

What happens then?

The new entity will undoubtedly follow in the footsteps of Virgin Media and TalkTalk in offering a ‘quadruple play’ service, comprising broadband, phone, mobile and television services. Customers of both companies will be offered incentives to combine their existing services under the new, unified banner, in a bundle.

Will customer service standards be affected?

Mergers of consumer businesses can frequently cause issues with customer service delivery.

Commercial unification processes can often create internal confusion, straining customer service provisions – furthermore, rates of customer enquiry almost inevitably inflate, meaning customer service departments are harder to reach.

This phenomenon may exacerbate existing problems; BT and EE already perform poorly in surveys of customer satisfaction. In a recent Ofcom survey of customer satisfaction, BT achieved 61 per cent, below the satisfaction ratings of key competitors, and below the sector average of 67%. The same survey ranked EE as the worst mobile network provider.

Will prices rise or fall?

This has been the subject of fervent debate since the takeover was announced.

Richard Lloyd, executive director of Which?, believes that prices will not fall – and, in fact, may increase. “Fewer players in any essential market is rarely good for consumers,” Lloyd notes, believing “unfair price increases or poorer service” to be staples of a less competitive market.

Gautam Srivastava of Moneysupermarket.com disagrees. “BT can’t say – as it has done today – that the deal will result in savings of £360m a year without passing on some of those savings to consumers.”

Ernest Doku, telecoms spokesman at uSwitch, believes customers – and consumers – will just have to wait and see. “When the mobile market in Austria contracted from four players to three, prices went up. However, the market in Ireland recently contracted and so far there has been no evidence of prices going up.”

In brief, the jury is very much out on whether existing customers will benefit from the merger.

What are the benefits of the takeover for me?

At present, industry studies indicate that mobile customers are increasingly less concerned about the handsets they receive, and are more interested in peripheral factors like price, package quality, benefits, data allowances and coverage. If you are an EE customer, expect BT to offer inducements and special offers aplenty – such as free or reduced cable subscriptions and electronic devices (such as tablets and laptops). If you are a BT customer, expect reduced mobile fees or free insurance for joining the new mobile division. There is also the prospect that BT could reinstitute ‘Orange Wednesdays’, the immensely popular incentive that EE announced it was scrapping last year.

 

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