Unhappy rivals
Meanwhile, some of BT's rivals have already started grumbling about the prospective merger. Speaking at an earnings press conference shortly after BT's announcement, Vodafone Group plc (NYSE: VOD) CEO Vittorio Colao called for a separation of the Openreach business. The takeover would create a dominant player in Britain's fixed and mobile markets and would need to be scrutinized, he said.
Earlier this week, Vodafone, which operates the UK's third-biggest mobile network, was reported to be preparing its own move into the converged-services market. By linking the Cable & Wireless network it bought in 2011 to BT's exchanges, it apparently aims to offer fixed broadband and TV services to its customers. (See Eurobites: Vodafone Plans Triple-Play in UK.)
Virgin Media -- the cable operator that Patterson cited as a key rival -- may also be concerned about the implications of BT's move given that it relies on an MVNO agreement with EE to provide mobile services.
Responding to analyst queries on that issue, Patterson insisted that BT was not a "reluctant wholesaler" and would maintain those MVNO arrangements. "We look forward to continuing our relationship will all EE's MVNOs, including the very big one," he said.
Another uncertainty is the network-sharing agreement EE has with Three UK , the UK's smallest mobile network operator. Should 3 owner Hutchison Whampoa Ltd. (Hong Kong: 0013; Pink Sheets: HUWHY) complete its own £10.25 billion ($15.61 billion) takeover of O2, that agreement could look untenable. (See Hutchison Offers $13.9B for UK's O2.)
Patterson said it was "premature" to start talking about EE's arrangement with 3 and has recently suggested that regulators may block Hutchison's move for O2 out of concern about its impact on mobile competition. (See BT Puts G.fast at Heart of Ultra-Fast Broadband Plans.)
Even so, today's announcement from BT and EE will make Hutchison even more desperate to seal that deal.
— Iain Morris, 
, News Editor, Light Reading
BT gains not only a mobile operation but also the "supply of all LTE Public Safety services to the UK Government and its agencies"- that puts BT as the monopoly player for both normal ethernet/LAN/WAN/fibre/voice services into government and MoD but also all of the public safety mobile services.
That is something for the competition commission to think about.