Competition authorities approve sale of Three's masts to Cellnex

(Image credit: Huawei)

The UK competition watchdog has given its approval to the sale of 6,000 mobile sites owned by Three’s parent company CK Hutchison - provided new owner Cellnex dispenses with 1,000 of its own.

The Competition and Markets Authority (CMA) had been holding up the completion of a €10 billion deal covering six European markets, fearing that it would give Cellnex too strong a position in the passive infrastructure market following its purchase of Arqiva’s assets in 2020.

Transactions for CK Hutchison’s masts have already been approved in Austria, Denmark, Ireland, Italy, Sweden.

Cellnex Three mast sale

Specifically, the CMA feared Cellnex’s position would prevent the creation of an alternative infrastructure provider, strengthening Cellnex’s hand in negotiations with mobile operators. This situation, it argued, and would ultimately lead to higher prices and lower quality mobile service for consumers.

However, the CMA is satisfied that its concerns can be addressed if Cellnex sells any site that geographically overlaps with one it intends to purchase from CK Hutchison. Any buyer would need to be approved by the CMA.

“Our decision today helps protect competition in infrastructure that mobile phone operators rely on,” declared Richard Feasey, Chair of the independent Inquiry Group. “The sale of this significant package of assets will allow a major supplier to compete against Cellnex when mobile networks look to negotiate new contracts in future.

“This, in turn, stops the threat of higher prices or worse terms for the operators and their customers as a result of this deal.”

Cellnex leases out infrastructure such as towers to operators so they can install their active equipment such as antennas to power their services. Using a third-party provider means operators are spared the additional cost and burden of maintenance.

Rival operator BT-EE had also argued the deal would impact competition but Three and Cellnex claimed the merger would actually achieve the opposite effect. In their submission to the CMA, the two companies said the deal was “strongly pro-competitive” and reflected a wider trend in the industry for operators to spin off or sell their passive infrastructure to third parties in order to raise revenues for network construction.

Cellnex added the mobile market will benefit from its ability to offer third parties access to the masts and accelerate the rollout of 5G across the UK from all operators. Meanwhile, CK Hutchison said the deal will unlock vital funds for its own 5G rollout.

Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.