Country’s smallest mobile operator has another go at bolstering its spectrum position following last year’s failed O2 merger.
3UK on Monday agreed to acquire fixed-wireless player UK Broadband in a £300 million deal that represents a fresh source of all-important spectrum for the country’s smallest mobile operator.
UK Broadband offers fixed-wireless services to consumers and businesses under the Relish brand, which was launched in June 2014. It was the company’s second attempt to crack the market after its Now Broadband service, which launched in 2012, failed to gain meaningful traction.
The company serves 15,000 customers.
Perhaps more importantly for 3, UK Broadband holds 124 MHz of spectrum in the 3.5 GHz and 3.6 GHz bands. It also holds spectrum in the 3.9 GHz, 28 GHz, and 40 GHz bands, which currently are used for point-to-point and point-to-multipoint wireless backhaul connectivity, but could one day conceivably be used for access networks.
Were 3UK able to refarm all that spectrum for mobile services, it would be in a far stronger position to compete with the likes of BT and its EE arm, and Vodafone, which between them hold 45% and 28% of the country’s usable spectrum respectively. 3UK has been campaigning vigorously for Ofcom to restrict the amount of spectrum that any single player can hold to 30% of available airwaves, saying that the current imbalance harms competition and consumers.
"UK Broadband gives us an opportunity to expand our ambition to provide high quality and great value internet connectivity for UK consumers," said 3UK chief executive Dave Dyson, in a statement.
3UK will pay £250 million for UK Broadband, plus a deferred £50 million will be made available as a credit toward an MVNO agreement on 3’s network.
3UK said it expects the deal to complete by the middle of this year, at which point UK Broadband will become a wholly-owned subsidiary of 3UK.
Monday’s deal will likely go down better with the competition authorities than 3UK’s unsuccessful attempt to merge with O2.
The European Commission blocked the £10.25 billion deal in May, on grounds that a reduction in the number of nationwide MNOs to three from four could have led to higher prices for customers.
UK Broadband, with its smaller customer base, and focus on niche market, is unlikely to cause the same regulatory ructions.