REG - Competition and Mkts - Telecoms tower site sale to address concerns

Cellnex Telecom SAAnnouncement

03/03/2022 17:45

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RNS Number : 5873D  Competition and Markets Authority  03 March 2022

Tower site sale to address concerns in telecoms merger

 

Cellnex must sell over 1,000 telecoms tower sites to address competition
concerns over its purchase of CK Hutchison's UK towers.

 

The decision by the Competition and Markets Authority (CMA) comes after an
in-depth Phase 2 investigation into the proposed deal.

 

Cellnex is an independent supplier of telecommunications infrastructure,
currently active across several European countries, and CK Hutchison is a
multinational conglomerate that currently owns and operates the Three mobile
network in the UK.

 

The proposed deal, in which Cellnex has agreed to buy CK Hutchison's UK
passive infrastructure assets, forms part of a broader set of transactions -
worth £8.6bn (€10bn) in total - involving assets in several European
countries. Passive infrastructure assets are structures, such as towers and
masts, that mobile network operators and other wireless communication network
providers attach electronic equipment to in order to operate their networks.
This includes the sites that the structures are built on.

 

The CMA launched an inquiry into the proposed deal in May 2021 and it was
referred for an in-depth investigation by an independent inquiry group in
July.

 

In keeping with its provisional findings issued in December 2021, the CMA has
found that the sale of the CK Hutchison business to Cellnex would raise
significant competition concerns. The sale of the business to Cellnex would
prevent the emergence of an important alternative competitor in the supply of
passive infrastructure, leaving mobile networks facing higher prices and more
onerous contracts in future contract negotiations. This, in turn, could result
in higher prices or lower quality services for users of mobile networks across
the UK over a period of time.

 

In order to address these concerns, Cellnex proposed the sale of all of its
existing sites that geographically overlap with the CK Hutchison assets it has
agreed to buy. This would result in a package of over 1,000 passive
infrastructure sites being sold to a purchaser approved by the CMA.

Having assessed this remedy in detail, the Inquiry Group concluded that it
would effectively address the competition concerns identified by the
investigation, meaning the merger could proceed.

 

Richard Feasey, Chair of the independent inquiry group, said:

 

"Our decision today helps protect competition in infrastructure that mobile
phone operators rely on. The sale of this significant package of assets will
allow a major supplier to compete against Cellnex when mobile networks look to
negotiate new contracts in future.

 

"This, in turn, stops the threat of higher prices or worse terms for the
operators and their customers as a result of this deal."

 

For more information, visit the Cellnex/CK Hutchison merger inquiry page
(https://www.gov.uk/cma-cases/cellnex-slash-ck-hutchison-uk-towers-merger-inquiry)
.

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