Three parent CK Hutchison to sell European mobile towers

(Image credit: Huawei)

Three’s parent company has agreed to sell its European mobile mast network for €10 billion to Cellnex.

CK Hutchison’s mast assets and businesses in Austria, Denmark, Ireland, Italy, Sweden and the UK will all be transferred in six separate deals which will close whenever the local regulatory requirements are met.

The first transaction is expected to close by the end of the year with the remainder concluding in 2021.

Three tower sale

Once completed, the two parties will enter into a long-term 15-year agreement in each country, which can be extended by the same length, and will also collaborate on the construction of 6.700 additional sites across the six countries.

CK Hutchison’s operators currently require funding to build 5G networks while the conglomerate’s other businesses in ports and retail are suffering from the ongoing impact of the Coronavirus pandemic. The sale will raise much needed capital and unlock significant gains for shareholders.

"We are pleased to gain a long-term partner in Cellnex while unlocking value in our telecom assets for our shareholders,” said Mr Canning Fok, CKHH’s Group Co-managing Director. “This will improve our operational efficiency and accelerate 5G rollout, put us in a very good position if the right opportunities arise, and provide us an opportunity to enhance our shareholders’ returns."

There has been a flood of investments in the sector by private equity firms in recent years because of the predictable, stable revenues promised by assets such as fibre networks and mobile masts. Meanwhile demand for ultrafast broadband and 5G means there is scope for growth.

This long-term view contrasts with the short-term pressures that network investment imposes on mobile operators who are in the middle of expensive network builds. An independent operator would also be able to agree deals with multiple operators, increasing revenues.

Spanish-based Cellnex has snapped up a vast array of infrastructure assets over the past few months, recently securing deals for towers in Portugal and Poland. Earlier this year it also concluded a deal to with Arqiva to buy masts the UK’s largest independent network infrastructure operator.

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.