Cellnex’s proposed takeover of Three’s UK mobile masts is set to face further scrutiny after neither party was able to resolve concerns that the deal would damage competition in the market for mobile infrastructure.
Three’s parent CK Hutchison agreed to sell its European tower assets last year for $10 billion as part of a series of separate transactions. The deals in Austria, Denmark, Ireland, Italy, Sweden hve gone ahead but the Competition and Markets Authority (CMA) elected to investigate in the UK.
“It’s important that services provided to mobile networks remain competitive so that the millions of businesses and consumers across the UK that use mobile phones can enjoy lower prices,” said Mike Walker, Chief Economic Adviser at the CMA said last month.
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“Cellnex is already the largest independent supplier of mobile towers in the UK. We’re concerned that this deal could help to lock in this position and prevent the emergence of new direct competition.”
Spanish-based Cellnex leases out access to ‘passive’ infrastructure such as mobile towers to mobile operators so they can install their active equipment such as antennas to power their services. As an independent operator, Cellnex can maximise the value of these assets by securing arrangements with multiple providers.
The company completed a series of transactions over the past year to strengthen its offering, most notably the acquisition of Arqiva’s masts in 2020. The CMA fears that the combination of Arqiva and Three’s masts would give Cellnex a huge advantage in the UK that could ultimately impact consumers and businesses.
It believes that CK Hutchison could have secured an alternative buyer for its assets – a move that would have maintained competition in the UK market.
The CMA gave both parties five days to suggest remedies its concerns and although it is understood that potential solutions were submitted, the aurhotiy did not deem any of these proposals to be suffidicent.
The issue has now been advanced for a ‘Phase 2’ investigation.
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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.