BT says Three-Cellnex mast deal will harm competition

BT says Cellnex’s proposed acquisition of Three’s mobile masts in the UK would negatively impact the market and make it more difficult for other operators to roll out 5G networks.

Three’s parent CK Hutchison has agreed a €10 billion deal to sell its European towers to Spanish-based Cellnex, which leases out access to ‘passive’ infrastructure such as towers to operators so they can install their active equipment such as antennas to power their services.

As an independent provider, Cellnex can maximise the value of these assets by securing arrangements with multiple providers, while selling operators can raise capital and free themselves of any maintenance burden.

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Cellnex Three mast sale

Transactions for CK Hutchison’s masts have already been approved in Austria, Denmark, Ireland, Italy, Sweden, however the deal has been held up by the Competitions and Markets Authority (CMA) in the UK.

The CMA is concerned that Cellnex’s share of the independent infrastructure market would be too great after it purchased Arqiva’s assets back in 2020. It believes CK Hutchison could have secured an alternative buyer what would have posed fewer issues.

BT agrees with that viewpoint. In a submission to the CMA, it argued that the deal would strengthen Cellnex’s position and increase costs for operators, while also increasing the barrier for any new entrant into the market.

“The merger will strengthen Cellnex’s already strong position in the UK and increase its supplier power to the detriment of its customers, and also to the detriment of smaller WIP [Wireless Infrastructure Providers] and new entrant providers’ ability to compete in the UK,” said BT.  In BT’s view, this would inevitably lead to higher prices and lower services levels.”

Furthermore, BT is concerned about the potential impact on MBNL – the tower sharing joint venture that was originally struck between Three and T-Mobile, with Orange’s infrastructure added in September 2010 following the merger that eventually created EE.

“BT believes that there is a realistic prospect that the merger will adversely impact BT’s ability to utilise the MBNL JV to roll out 5G services to UK customers,” it added.

For their part, CK Hutchison and Cellnex argue the merger will actually increase competition. In their submission to the CMA, the two companies said the deal was “strongly pro-competitive” and reflected a wider trend in the industry for operators to spin off or sell their passive infrastructure to third parties in order to raise revenues for network construction.

Cellnex says the mobile market will benefit from its ability to offer third parties access to the masts and accelerate the rollout of 5G across the UK from all operators. Meanwhile, CK Hutchison says the deal will unlock vital funds for its own 5G rollout

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