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The UK’s Competition and Markets Authority (CMA) has said that the €10 billion purchase of CK Hutchison’s European towers could pose a threat to the competitiveness of the UK market
In the past year or so, Cellnex has been on a major shopping spree for tower infrastructure all over the world, but particularly in Europe. Most recently, the infrastructure specialist in January announced a deal with Deutsche Telekom to combine their Dutch tower assets, while in April Cellnex closed the acquisition of 7,000 Polish mobile sites from Play.
But by far the company’s biggest acquisition took place a little earlier, in November 2020, when it signed an agreement with CK Hutchison to purchase all of the operator’s European tower assets for a total of around €10 billion. Since then, constituent tower handovers have happened smoothly in Italy, Austria, Denmark, and Ireland.
However, the process is meeting resistance in the final remaining market, the UK. The CMA has today raised concerns about the purchase of CK Hutchison (Three)’s roughly 6,000 towers inhibiting competition in the UK market, potentially driving up prices and offering lower quality services for operators.
Cellnex are already the UK’s largest tower supplier following their £2 billion acquisition of Arqiva’s infrastructure business last year. The CMA fears that the acquisition of all of Three’s towers would make their position in the market somewhat unassailable.
The CMA began an investigation into the deal in May and the results of this Phase 1 inquiry has shown that CK Hutchison “could have sold these to an alternative buyer rather than existing market leader Cellnex”, according to a CMA statement.
“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 the CMA’s chief economic advisor, Mike Walker. “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.”
The CMA has given Cellnex and CK Hutchison five working days to offer legally binding proposals to assuage these concerns.
What are the long term impacts of major tower sales for the UK telecoms industry? Hear what the experts have to say at this year’s live Connected Britain
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