CMA suggests Cellnex-CK Hutchison tower deal could harm competition, lead to higher prices

17 Dec 2021

The UK’s Competition and Markets Authority (CMA) has released its provisionally findings on Cellnex’s proposed purchase of CK Hutchison’s telecoms towers, adjudging it could harm competition and lead to higher mobile charges.

In reporting its initial findings on the matter, the CMA said that, having reviewed ‘a range of evidence’ in relation to CK Hutchison’s internal decision-making, it had provisionally found that if the deal with Cellnex had not been agreed, then the former’s passive infrastructure assets would most likely have been sold to an alternative buyer. It added that its investigation had provisionally determined that the deal could raise ‘significant competition concerns’, with the CMA arguing that the sale of this business to Cellnex, rather than an alternative buyer, may prevent the emergence of a third major national player – instead leaving a duopoly in which Cellnex and Cornerstone Telecommunications Infrastructure Limited (CTIL) would account for over 90% of the market. Such a situation, the competition watchdog argued, could ‘materially reduce competition to supply the infrastructure requirements of mobile networks in future contract negotiations, running the risk of those networks facing higher prices and more onerous contracts’. Meanwhile, the CMA said it was concerned that this could result in higher prices or lower quality services for mobile network operators (MNOs), which in turn could mean an adverse impact for users of mobile networks across the UK.

The CMA is now seeking feedback on its findings by 14 January 2022, as well as on its notice of possible remedies by 7 January 2022, while it has said it expects to issue a final decision by 7 March 2022.

As previously reported by CommsUpdate, back in July 2021 the CMA announced that it had referred the proposed acquisition of the passive infrastructure assets of CK Hutchison and its subsidiaries in the UK by Cellnex for a full investigation. That announcement came after Spain-based mobile tower firm Cellnex in November 2020 confirmed an agreement to acquire 24,600 towers from CK Hutchison in the UK, Italy, Ireland, Austria, Sweden and Denmark in a deal valued at around EUR10 billion (USD11.3 billion).