Watchdog warns Cellnex telecoms tower deal could ‘mean higher mobile prices’

The Competition and Markets Authority (CMA) has said the deal will result in a ‘duopoly’ controlling more than 90% of the UK market.

Henry Saker-Clark
Thursday 16 December 2021 18:00
A telecoms tower on Saddleworth Moor in South Pennines. (Danny Lawson/PA)
A telecoms tower on Saddleworth Moor in South Pennines. (Danny Lawson/PA)

The UK’s competition watchdog has warned that a deal by Cellnex to purchase telecoms towers from rival CK Hutchison could “mean higher prices” for mobile customers.

The Competition and Markets Authority (CMA) added that the deal, which was agreed in January, could worsen terms for mobile operators and their users.

Cellnex, a Spanish independent supplier of telecoms infrastructure, agreed to buy the European infrastructure assets of conglomerate CK Hutchison, which also owns mobile brand Three.

The deal included CK Hutchison’s UK towers and masts and was part of around £8.6 billion of deals by Cellnex at the time.

Cellnex owns the structures which mobile operators and other wireless communications network providers attach equipment to in order to run their networks, as well as the sites these are built on.

In May, the CMA launched an inquiry into the deal and referred it to an in-depth probe by an independent inquiry group in July.

Two months later, BT warned that the deal would hand too much power to Cellnex and pose competition concerns across the sector.

The CMA has now said it has provisionally found the sale to Cellnex over an alternative buyer “may raise competition concerns” as it will leave “a duopoly” where Cellnex and Cornerstone Telecommunications Infrastructure Limited (CTIL), a joint venture between O2 and Vodafone will account for over 90% of the market.

Richard Feasey, chair of the independent inquiry group, said: “Mobile phones are an essential part of everyday life for people and businesses.

“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 only two major suppliers.

“Less competition could mean higher prices or worse terms for both mobile operators and their customers.”

The watchdog said it is inviting further submissions to help with its investigation by January 14, with a final decision due by Monday March 7.

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