Concerns over the highly concentrated UK market mean remedies would be needed to complete the sale. The form they would take is unclear
A €10bn deal across six countries: In November 2020, Cellnex announced the acquisition of 24,600 towers from the CK Hutchison group across Austria, Denmark, Ireland, Italy, Sweden, and UK for €10bn. Regulatory approval was granted swiftly in four countries (Austria, Denmark, Ireland, and Sweden) allowing the two companies to finalise the deal in January 2021. In April 2021, competition authorities in both Italy and the UK launched investigations into the transaction. In Italy, the AGCM cleared the deal in June, but on the condition Cellnex made available a certain number of sites to new mobile operators licensed in the last five years (Iliad) in municipalities with fewer than 35,000 inhabitants.
The CMA foresees potential harm to consumers: On 27 July, the UK Competition and Markets Authority (CMA) started a Phase 2 investigation into the deal, having found a realistic prospect of a substantial lessening of competition in the independent supply of passive infrastructure assets to mobile operators. In Phase 1, the CMA found evidence that CK Hutchison could have sold its towers to an alternative buyer other than Cellnex, which is already the market leader in the UK. The result of which would’ve meant more competition for Cellnex. As things stand the CMA believes the deal could mean higher prices or lower quality for services provided to mobile operators, and a knock-on effect for consumers.
The UK market is already highly concentrated: It is perhaps unsurprising that the CMA is the authority that raised the most serious concerns about the deal across the six countries involved. Cellnex is already by some distance the largest independent supplier of mobile towers in the UK, with a market share of between 80–90% for developed macro sites. Other providers pose only a limited constraint on Cellnex. For comparison, the Italian competition authority raised concerns about the prospect that Cellnex would reach a 70% market share after the merger, and that the second largest operator in the market was a joint venture between TIM and Vodafone with limited openness to hosting third-parties. The likely remedies the CMA will consider are currently unclear, but those agreed in Italy make little sense given the UK market dynamics. The regulator set a deadline of 10 January 2022 to complete the investigation.
Source: https://www.gov.uk/cma-cases/cellnex-slash-ck-hutchison-uk-towers-merger-inquiry
