In doing so it would be the only national authority to block a deal that spans across six countries
A €10bn deal across Europe: In November 2020, Cellnex agreed to acquire 24,600 towers from CK Hutchison across Austria, Denmark, Ireland, Italy, Sweden, and UK for €10bn. This would bring Cellnex to control over 100k tower sites across 12 European countries in total. The deal was subject to regulatory approval, which was granted swiftly in four countries (Austria, Denmark, Ireland, and Sweden) allowing the two companies to finalise the deal in January 2021. In Italy, the AGCM cleared the deal in June, but on the condition that 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. In the UK, the CMA raised concerns, and in July decided to open a phase 2 investigation.
The CMA confirms its initial concerns: On 16 December, the CMA published the provisional findings of its investigation, which confirmed the regulator’s initial concerns. The CMA argues CK Hutchison could instead have sold its infrastructure to an alternative buyer other than Cellnex, which is one of the two independent suppliers currently operating in the UK. The deal could prevent the emergence of a third player and create a duopoly with a 90% market share. This could result in higher prices or lower quality services for mobile network operators, with a negative knock-on effect for end-users.
Behavioural remedies will not be sufficient: The CMA is now inviting views (until 7 January 2022) on possible remedies. It has already stated that its preferred option is to block the merger entirely. As an alternative, it could mandate the divestiture of part of Cellnex’s existing assets to a suitable buyer. The CMA is unlikely to just rely on behavioural remedies, since it believes they would be ineffective to address the problems identified.
A warning sign for MNOs seeking consolidation? The CMA’s decision will please BT, which made submissions to the CMA warning about the risk of higher prices Cellnex would charge and an adverse impact on 5G rollout. It is now clear that the CMA does not want this market to be dominated by two large players. It’s hard to say how this translates into the CMA’s view of the retail mobile market – but arguably it’s not a good sign for operators that are looking to consolidate in the future (e.g. Vodafone and Three following recent rumours of a possible merger). In this case, the CMA appears to be concerned about higher mobile prices. Any MNOs looking to merge will likely need to reassure the CMA in that respect for starters.
Source: https://www.gov.uk/government/news/uk-telecoms-tower-merger-risks-higher-mobile-costs
