The UK Competition & Markets Authority (CMA) has provisionally concluded that the proposed takeover of CK Hutchison's telecoms towers by Cellnex would harm competition. Comments on the initial findings can be submitted by 14 January 2022, with a final decision expected by 07 March 2022.
The sale of the UK passive infrastructure assets is part of a wider deal involving the sale of CK Hutchison's assets in several European markets. The CMA opened an investigation into the seal in May 2021, with an in-depth investigation announced in July 2021. Cellnex is currently one of two large, independent suppliers of passive infrastructure in the UK after buying Arqiva's telecoms business in 2020. The other is Cornerstone, a JV between O2 and Vodafone.
The CMA has provisionally found that CH Hutchison's assets would have most likely been sold to an alternative buyer if the deal with Cellnex had not been agreed. This shows that CK Hutchison had multiple options for commercialising these assets. The CMA believes the sale to Cellnex raises significant competition concerns. In particular, the deal with Cellnex could prevent the emergence of a third national player, instead of a duopoly where Cellnex and Cornerstone control more than 90 percent of the UK market. This will reduce competition to supply the infrastructure needs of mobile networks in future contract negotiations, leading to mobile networks facing higher prices or lower quality services.
In a statement, Cellnex Telecom acknowledged the CMA's announcement and said it would review the findings and engage with the CMA in response to a notice of possible remedies. Cellnex insisted that it was a pro-competitive deal which will create strong incentives to improve, unlock and extend mobile coverage across the UK, including 5G.
