News
The Competition and Markets Authority (CMA) has announced that their investigation shows that Cellnex’s purchase of CK Hutchison’s UK towers poses “significant competition concerns”
In November 2020, Spanish infrastructure giant Cellnex signed a €10 billion deal to purchase all of CK Hutchison’s European mobile tower assets. In total, this deal spanned around 24,600 towers in various markets across the continent, including around 6,000 in the UK.
But while the acquisition of Hutchison’s towers in markets like Italy, Austria, Denmark, and Ireland were closed with little delay, the UK is proving something of a headache.
In May 2021, the UK’s competition regulator, the CMA, announced it would launch an investigation in the deal, fearing that the move would give Cellnex an unassailably dominant position within the UK market. Cellnex is already the largest neutral tower operator in the UK, with the CMA suggesting that their control of the market could lead to lower quality and more expensive services for the country’s mobile operators.
The first phase of the investigation concluded in July, with the CMA ruling that further investigation was needed, suggesting the deal “could prevent the emergence of new direct competition” for Cellnex in the UK market. Perhaps most notable in the CMA’s report at this stage was the suggestion that CK Hutchison could have sold their tower assets to an alternative buyer and did not have to deal with the existing market leader.
As part of the second phase of the investigation, the UK’s mobile operators were asked to comment on the deal, with BT weighing in to voice their opposition to the deal. The operator said that, if permitted, the deal would create “serious competition concerns that will adversely affect the supply of access to developed macro wireless telecommunications sites and ancillary services to BT and other UK wireless communication providers” and would “inevitably lead to higher prices”.
Now, the CMA has provisionally concluded that the sale of the tower assets to Cellnex would indeed cause competition issues within the UK, reiterating the fact that CK Hutchison would have had the option to sell these assets to various other parties.
The CMA has given Cellnex and CK Hutchison until January 7 2022 to submit “comments on possible remedies” to the situation. According to the regulator, possible solutions would be the introduction of a legal requirement for Cellnex to sell some of its towers to potential new market entrant in the UK.
“The CMA prefers structural remedies, such as divestiture or prohibition over behavioural remedies,” said the regulator in a statement. “The divestiture package would also need to be appropriately configured to be attractive to potential purchasers.”
For their part, Cellnex has repeatedly said they disagree with the CMA’s assertions that the deal will be bad for competition, suggesting that they will allow equal access to infrastructure for all players, therefore driving up the mobile sectors competitiveness, especially when it comes to 5G.
Nonetheless, the tower operator says it "will engage with the CMA in response to its ‘notice of possible remedies’, including with any practical alternative remedies the company wishes the CMA to consider”.
What would the Cellnex tower deal mean for mobile operators in the UK? Find out what the operators think at Connected Britain 2022
