Wednesday, July 08, 2015

Don't believe the spin BT will not manage EE any better than it's current owner

The Chief Executives if BT and EE have recently been on a charm offensive aimed at getting us to buy into the view that BT buying EE is a good idea for more than the shareholders of Orange and DT.  They have presented interesting scenarios about Network Investments whilst managing to limit details about pricing and product strategy.

Looking from the outside I fear that in becoming a division of BT Retail the mobile tallent will walk away from the business rather than stay and execute on the plans of the Chief Executives.  Nobody is talking about staff retention for EE and if BT fail to do so then they will be serious trouble.  BT's history in managing Mobile assets is not a good one and for the past 15 years they have not had to, which means they have very little understanding of 3 and 4G Networks.  The Civil Service mentality within BT means that very few within EE will feel comfortable but their knowledge is vital is any progress is to be made post acquisition on the development of Radio Access Networks.

The addition of Mobile to the regulatory mix will give Ofcom the chance to balance the advantage that BT has held recently in gaming investigations.  The EE regulatory team will not find the present relationship carried forward and they might find that they are queried more about network coverage and quality. Becoming the largest operator in both Fixed and Mobile Networks means that BT will need to demonstrate that it is meeting access requirements as well as investing in upgrades.  The Consumer may well benefit in the short term from BT taking over EE in that I expect that a significant investment will be made in Subscriber Acquisition budgets in an effort to retain EE customers and switch BT ones to the Network.  Will shareholders be happy with gifts of subsidised smartphones and tablets?  The increased load on BT Wifi hotspots will also be an interesting traffic light on current investment in the BT Broadband network and upgrade cycle.

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