Yahoo Finance Mobile phone mast takeover ‘threatens higher bills’
Consumers are threatened with higher mobile phone bills if a £9bn takeover of mobile masts by the Spanish infrastructure empire Cellnex is allowed to go ahead as planned, the competition regulator has warned.
Cellnex is attempting to acquire 24,000 sites from CK Hutchison, the owner of the UK mobile operator Three and its sister companies across the continent. The Madrid-listed specialist has rapidly assembled a €35bn pan-European business in recent years by buying masts from networks and renting access back to them.
The Competition and Markets Authority (CMA) said the deal risks giving Cellnex a stranglehold over the market that could lead to higher bills, however. It said it was considering blocking the transaction, or forcing the two companies to sell off some of the masts to a rival.
The CMA said that the deal would leave nine out of 10 mobile masts in the UK in the hands of either Cellnex or Cornerstone, a joint venture between the operators O2 and Vodafone. Cellnex already holds a strong position in the UK market after acquiring 7,400 masts for £2bn from Arqiva two years ago.
Competition officials said its latest expansion plans could make it harder for networks to negotiate on prices and ultimately push up the cost of consumers’ mobile phone contracts. It would also prevent the emergence of a rival tower company.
Richard Feasey, chair of the inquiry, said: “This deal may prevent the emergence of a third major national provider of the critical infrastructure on which mobile operators depend, leaving them with only a choice of two major suppliers.
“Less competition could mean higher prices or worse terms for both mobile operators and their customers.”
Cellnex said it was willing to work with the regulator on “any practical alternative remedies”. The company said: “Cellnex continues to believe that this is a strongly pro-competitive deal.” A CK Hutchison spokesman said: “We strongly disagree with the CMA’s provisional findings".
Three has claimed that "simplistic and misleading" opposition to the deal risks undermining its ability to invest in 5G network upgrades.
The sale has been viewed by analysts as a potential prelude to a merger with Vodafone's UK business.
CK Hutchison previously tried to sell its Three mobile network to O2 in 2016, but the deal was blocked by the European Commission. The ban was subsequently overturned by European Court of Justice in 2020, long after the deal had collapsed.
A final decision on the masts sale is expected in March.
