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Three UK Parent Close to £9bn Sale of Mobile Masts to Cellnex

Thursday, November 5th, 2020 (9:35 am) - Score 11,064

The parent of mobile operator Three UK, CK Hutchison Holdings, has officially announced that they’re in an “advanced stage of negotiations” to potentially sell their mast and rooftop infrastructure across Europe to Cellnex in a transaction that could be worth c.£9bn (10bn Euros); it might also boost their 5G rollout.

Spanish company Cellnex recently became a more familiar name in the UK after they gobbled Arqiva’s UK masts and rooftop sites for £2bn. One of the opponents of that deal was Three UK, which initially warned that it could make the company 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 such sites (i.e. higher prices). The Competition and Markets Authority (CMA) ultimately found that the deal “does not raise competition concerns” (here).

Fast forward to today and a number of European operators have recently been looking at ways to help fund their expensive deployments of new 5G based mobile broadband technology, as well as needing to cut their debts. For example, Vodafone have already moved to monetise a substantial proportion of its European tower infrastructure (Vantage Towers ). Suffice to say that Three UK is now considering a similar solution, albeit via Cellnex.

The proposed agreement will also include support for an “accelerated 5G network rollout through a committed built-to-suit expansion program,” which doesn’t really tell us much. Three UK will no doubt want to retain as much preferential access and support as possible to their current infrastructure.

CK Hutchison Holdings Statement

The Company announces that the Group is in an advanced stage of negotiations with Cellnex Telecom S.A. (“Cellnex”) and has reached substantial agreement on the key commercial terms for the disposals of the Group’s interests in its telecommunications infrastructure assets in Europe held indirectly by CK Hutchison Group Telecom Holdings Limited, an indirect wholly-owned subsidiary of the Company, to Cellnex.

Upon completion, Cellnex and the relevant Group companies will enter into service agreements for Cellnex to provide to the Group telecommunications infrastructure services and to support an accelerated 5G network rollout through a committed built-to-suit expansion program (together the “Transactions”). Agreements in relation to the Transactions remain subject to finalisation of definitive documentation.

Total proceeds on completion of the Transactions are approximately EUR10.0 billion, including minority partners’ share. However, no decision has been taken to proceed with any transaction and there can be no certainty that any transaction will proceed or, if it does, what the scope or terms of such transaction would be.

The Company will make a further announcement pursuant to any applicable requirements prescribed by the Listing Rules and/or Part XIVA of the SFO as and when appropriate.

At this point some might wonder what sort of impact this could have on Three UK’s network sharing arrangement with EE (BT) under the umbrella of Mobile Broadband Network Limited (MBNL), although Vodafone have already shown that such agreements are not an obstacle. Suffice to say, we don’t expect MBNL to be too much of a problem.

Whether or not such a deal will actually be able to “accelerate” their 5G deployment, or if that’s just a bit of spin, is another matter. In the UK Three has been hit hard by the Government’s decision to ban Huawei and so anything that can help to get their 5G rollout back on track is probably a good thing.

Leave a Comment
13 Responses
  1. Avatar Buggerlugz says:

    Why would you sell your mast/rooftop space and then effectively rent that space for your own kit back of the company you sold them too?

    1. Avatar MartinConf says:

      Its nothing new

      Lots of large organisation do it, I believe BT have done it with a lot of their telephone exchanges.

    2. Avatar John H says:


      1. Reduces debt on balance sheet

      2. Provides cash injection to speed

      3. If the mast sites are currently on the balance sheet at less than 9bn then an immediate profit.

      4. No doubt includes fixed rentals going forward


      1. Loss of control of sites

      2. Use of sites is open to competitors

      3. All the site locations become known.

      4. Rental is additional running cost

    3. Avatar Matt says:

      CK Hutchison Holdings probably has areas of its investment group which can find a better return on the £9bn.

      Similar story to what’s happening with datacenter and cloud, foundations of these services such as land/buildings are capital intensive and don’t provide a great return on capital employed.

    4. Avatar Polish Economic Migrant says:

      The main benefit is geting rid of Huawei equipment.

  2. Avatar Buggerlugz says:

    I’d actually think it was a good idea if Three actually spent the money on its mast tech (and pathetic back-haul), but being with them a year and seeing the downward tumble the companies service quality and speed is taking, I’m very sceptical.

    1. Avatar TheTruth says:


      I have seen you bemoaning Three for a long time now, have you considered moving to another provider if you’re not happy with them?

  3. Avatar Buggerlugz says:

    Yes, unfortunately I’m locked into another 10 months of contract.

    1. Avatar Adam says:

      You are not stuck in a 10 month contract. I have cancelled my Three contract twice over the years, one recently. If you can get through to their live chat service, simply ask for the complaints department. Tell them what abysmal service you get/got and that you’re done with it. I had to send back my routers but there was no cancellation fee whatsoever. Though, i have heard people being able to keep their routers after cancelling. I can almost guarantee that you aren’t stuck in a 10 month contract with them. Unless its mobile related.. That may be slightly different.

  4. Avatar Mr Moore says:

    what will happen to MBNL ?

  5. Avatar Michael V says:

    If this means it can help Three, same as other Operators roll out 5G faster then I welcome it.
    The government has made it very hard for all four networks now having to rip out all Huawei hardware. 5G roll out seems to have taken a back seat for some.
    I think 4G coverage & speed is fine, do I’m not in any rush to live on Three’s 5G network.

    I hope this works out for them.

  6. Avatar Edna Buckett says:

    Three will just use it as an excuse for somebody else to blame. 5G deployment is too slow.

    1. Avatar Connor says:

      To be fair Three has been quite quick deploying 5G.

      Going from my experience in Wolverhampton, Vodafone got here first and has only just expanded past the city centre while Three (alongside EE) have deployed whole new sites and almost reached my home.

      EE has also done a really good job but their coverage map is overstated and Three’s is unstated. I’ve in an area listed as an EE 5G area and about 1 mile outside Three’s 5G area but Three was the only one who got a 5G signal.

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