March 4, 2022
The UK Competition and Markets Authority (CMA) has OKed its part of Cellnex’s mega-passive infrastructure M&A, with one condition.
When the deal was announced back in 2020 it seemed like a done deal but the CMA had other ideas. A regulators are inclined to do, it took its sweet time looking into the implications for the UK telecoms sector. Over a year later the CMA declared the resulting market would look far too much like a duopoly for its liking.
So imagine our surprise to see a press release in our inbox today revealing the move had been given the green light nonetheless. The only thing Cellnex had to do to make the CMA overcome its visceral hatred of duopolies is to divest around 1,000 sites that will be redundant due to overlap after the acquisition anyway. In other words the UK authority that exists explicitly to prevent monopolies has just approved the creation of what it concedes is a duopoly.
“The combined agreements with CK Hutchison not only strengthen our position as a key pan-European operator, but also reinforce our partnerships with our customers and open up new opportunities and approaches for collaboration,” said Fundamentally, this rationalisation of infrastructure will create the required incentives to unlock, improve and extend mobile coverage, including 5G, across these key markets.”
The divestment will have to be picked up by someone other than CTIL for there the UK to have a remotely plausible third player, so it will be interesting to see who that ends up being. Either the UK operators are fairly relaxed about having so little choice between passive infrastructure partners or the CMA ignored their concerns. Either way it’s yet another win for Cellnex.
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