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Mobile Operator Three UK Allegedly Ponders Sale of 5G Masts

Monday, October 5th, 2020 (8:20 am) - Score 3,720
three uk mobile broadband

Mobile operator Three UK is reportedly considering whether or not to sell some of its key assets, such as their mobile masts, in order to cash-in on rising valuations for the latest generation of gigabit-capable 5G (mobile broadband) and existing 4G network infrastructure. A merger might also be on the cards.

According to The Telegraph‘s (paywall) industry sources, such a move could raise billions for the operator and might even pave the way for a possible merger. However, the only operator left that Three UK could realistically merge with is Vodafone (EE is already part of BT, while O2 is about to become part of Virgin Media), which would also raise some challenges (see below) and it’s not clear if there would be enough benefit for both sides.

In order to conduct a merger Three UK would first have to exit their existing network sharing arrangement with EE under Mobile Broadband Network Limited (MBNL), which wouldn’t necessarily be a smooth process. Likewise, O2 and Vodafone also have a network sharing arrangement via Cornerstone (formerly CTIL). Balancing all of this sounds like a complex undertaking, but it might in turn enable BT (EE) to sell more of its masts.

At this point some of our readers may recall that Three UK’s proposed merger with O2 in 2016 was blocked by competition concerns from the EU and Ofcom, most of which centred around the regulatory desire not to see the number of mobile operators reduced from three to four (one fear was that this could result in higher prices for consumers, due to less competition). However, that ruling was recently overturned by the EU (here), but it’s unclear what Ofcom’s position may be once the UK fully exits the EU at the end of this year.

Meanwhile a number of potential suitors have reportedly indicated an interest in Three’s mast and rooftop infrastructure, such as Cellnex. The latter only recently completed a deal to gobble £2bn worth of Arqiva’s UK masts and rooftop sites (here). Three UK declined to comment.

Leave a Comment
17 Responses
  1. Avatar Buggerlugz says:

    “gigabit-capable 5G” bit of a stretch there Mark? It is Three’s 5g you’re talking about!

    1. Avatar Mark says:

      I get faster speeds on EE’s 4G than what I do on Three’s 5G

  2. Avatar Tom says:

    It just goes to show the incompetence of Ofcom and the EU regulatory Commissioner in stopping the totally reasonable Three-O2 merger on completely specious grounds.

    Where were the same concerns when they allowed the merger of the UK ventures of Deutsche Telekom (T-Mobile) and France Télécom (Orange UK), then the subsequent acquisition by BT? Or the merger of O2 and Virgin Group?

    Now we have the far worse duopoly position of only two “quad play” operators, Virgin and BT, casting a hugely distorting presence over four markets now, rather than just one.

    No doubt there’s a revolving door or two between rhe regulators and a number of the companies listed above.

    1. Avatar Salacious Soup says:

      Nonsense! They were right to reject the merger as it would have created a defacto monopoly. Competition would have reduced as a result. Competition authorities will not sanction a merger that creates or gifts the JV the largest slice of the market. I don’t think Three will merge with another UK MNO…..if I’m honest Three will probably end up buying a fixed line OpCo like TalkTalk to compete on quadplay.

    2. Avatar Mike says:

      Three hiked prices in anticipation of the merger (presumably because they said they wouldn’t raise prices afterwards). Since it was declined prices have come back down.

      Selling off property before an economic downturn is a wise move, I also wonder whether these masts will conincidently have Huawei kit in them.

  3. Avatar Buggerlugz says:

    Personally as things are, I don’t see anything other than BT’s monopoly.

  4. Avatar Craig says:

    Am I missing something, but Three wants to sell masks, doesn’t that mean less coverage and therefore a worse signal?

    1. Avatar Craig says:

      Masts – sorry.

    2. Avatar freddie says:

      So nothing new there then.

  5. Avatar Bill says:

    Aren’t masts required to deliver 5G?

    If so how does selling them off help???

    1. Avatar Wujek Pawel says:

      They will sell them, get rid of problematic Huawei equipment and future upgrade costs and then they will rent them from the company like MuxCo.

  6. Avatar Torygraph paywall breakthrough says:

    The Torygraph‘s paywall is easily bypassed by pressing the stop button, whilst an article is loading.

    1. Avatar Mike says:

      You can also disable javascript on these sites.

  7. Avatar Mike 14 says:

    Vodafone UK and 3 UK will soon merge.

    1. Avatar Craig says:

      Is that a good thing?

    2. Avatar Samuel says:

      1. Would of ofcom allow this
      2. What benefits to either company is there
      3. You sound pretty sure….do you know something we don’t;-)

  8. Avatar robert says:

    the rumour was sky would take 3 and after the Irish ceo took over who knows the future of 3

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