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The Competition Markets Authority (CMA) has provisionally cleared the BT Group's £12.5 billion takeover of mobile phone network EE.

The move is set to create a giant communications firm capable of covering fixed-line phones, broadband, mobile and TV. It is also set to more than treble BT's retail customers, adding its current 10 million customers to EE's 24.5 million direct mobile subscribers.

The deal, which was first announced in February, had initially sparked concerns over competition, but the CMA has since ruled the move is "not expected to result in a substantial lessening of competition" in the UK".

John Wotton, chair of the CMA inquiry said: "Having considered all the evidence, the group does not provisionally believe that, in a dynamic and evolving sector, it is more likely than not that BT/EE will be able to use its position to damage competition or the interests of consumers."

A key finding of the CMA was that the two firms operated in two very different areas, with BT specialising in fixed communications services, while EE supplied mobile communications services.

BT chief executive Gavin Patterson said: "The combined BT and EE will be good for the UK, providing investment and ensuring consumers and businesses can benefit from further innovation in a highly competitive market".

The inquiry has invited responses to its provisional report and will publish a final report in January.

While the news will delight BT, it may not be enough to stop Ofcom breaking up Openreach, its internet broadband business, which has been criticised by market rivals for stifling competition.

The CMA said in a statement: "We are aware of concerns voiced recently about Openreach and wider concerns are currently being considered by Ofcom in their review of the whole telecommunications market."

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