What happened
On 19 October the Competition and Markets Authority (CMA) delivered its report to the Secretary of State for Culture, Media and Sport on BT's completed acquisition of TalkTalk Telecommunications and PlatformX Communications. The government now has to decide whether the deal should be referred for a phase 2 investigation.
Background
TalkTalk had been looking for a buyer for its consumer and wholesale businesses after a period of financial difficulty. According to the Department for Culture, Media and Sport (DCMS), a number of potential buyers could not agree a deal for the whole business before BT reached agreement.
On 5 October Culture Secretary Lisa Nandy issued a public interest intervention notice under the Enterprise Act 2002. The notice relied on the existing public health emergency ground and a newly proposed ground covering disruption to public services, critical national infrastructure and supply to vulnerable customers. DCMS said its priority was to guard against risks to life and to the continuity of telecoms services if TalkTalk's connectivity were disrupted, noting that its networks support emergency calls and other critical services.
The CMA served a pre-emptive action order on 6 October, which keeps the businesses separate while the review is under way, and granted a derogation the same day. Its invitation to comment ran from 5 to 9 October.
What the report covers
The CMA's report assesses whether a relevant merger situation has been created and whether it may be expected to result in a substantial lessening of competition in any UK market. It also advises on considerations relevant to a reference and summarises representations on the public interest grounds. The CMA's case page does not publish the report's conclusions.
Next steps
The Secretary of State will decide, taking both competition and public interest issues into account, whether to refer the transaction to phase 2.
Why it matters financially
The deal joins the UK's largest fixed operator with one of its biggest broadband and wholesale rivals. It also affects demand for Openreach and for alternative fibre networks. A phase 2 referral or remedies could change how BT integrates the business and what it gets out of the deal. The intervention also suggests the government is prepared to step in when a struggling telecoms provider could fail. The sources did not report a deal value.