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CMA Shuns Competition Fears to Clear £2bn Cellnex Buy of Arqiva

Wednesday, April 22nd, 2020 (1:53 pm) - Score 1,295
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The Competition and Markets Authority (CMA) has today cleared Arqiva to proceed with the proposed £2bn sale of their UK masts and rooftop sites to Cellnex (here) which, despite protests from mobile network operator Three UK, ultimately found that the deal “does not raise competition concerns.”

According to last year’s agreement, the deal itself includes 7,400 cellular sites (masts and towers), as well as urban rooftop sites, and the right to market a further 900 sites across the United Kingdom. Arqiva’s existing concession agreements with local authorities for the use of street furniture (often used for the installation of 4G/5G and WiFi small cells) are also understood to be included.

However, Three UK had previously warned that the sale could make Cellnex too dominant (here), not least because they would gain “control of over 80% of independent mobile sites in the UK” and there would thus no longer be much competition when negotiating future access to cellular sites (i.e. creating the potential for higher prices).

Despite those concerns the CMA found that Cellnex is currently only a small player in this market (including for small cells). On top of that they “carefully considered whether Cellnex was in the process of expanding its UK presence before the merger, [but] ultimately found that Cellnex would not have been a significantly stronger competitor if it had not bought the Arqiva business.”

The CMA also found that, following the merger, the combined business will continue to face competition from several other independent providers, including WIG and the Freshwave Group. “Major customers such as mobile network operators can also continue to use their own existing infrastructure sites, or develop their own new sites, as they do for the majority of their demand at present,” said the CMA.

Following a thorough investigation, the CMA has found that the deal does not raise competition concerns in the supply of large telecommunication infrastructure like mobile towers and pylons,” said today’s conclusion.

Proceeds from the sale are now expected to be used to help pay down Arqiva’s sizeable debt. Crucially the deal does not impact their remaining broadcast infrastructure for TV and Radio services (i.e. around 1,500 broadcast transmission sites in the UK and 5 teleports) or their interests in machine-to-machine data services (i.e. smart meter networks for the utilities sector).

Leave a Comment
3 Responses
  1. Avatar Arthur says:

    What’s the issue with Three?

  2. Avatar Buggerlugz says:

    It didn’t want to pay more for mast access than it was currently. It seems with Three there is always an issue, doesn’t it? Every news article they appear to be disagreeing with one company or another.

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