CMA says Cellnex purchase of CK Hutchison towers would create a duopoly

The UK Competition and Markets Authority has said that the proposed deal for Cellnex pick up CK Hutchison’s passive infrastructure risks higher mobile costs.

Part of a wider £8.6 billion deal, the purchase involves the sale of CK Hutchison’s passive infrastructure across six countries – around 30,000 sites in total.

The CMA, which launched the investigation back in May, asserts that the purchase would create an effective duopoly, in which Cellnex and CTIL would account for over 90 percent of the passive infrastructure market, which would make it difficult for any third player to get in on the game.

It claims CK Hutchison is able to sell its assets to a firm other than Cellnex, and the decision not to may ultimately result in higher prices or lower quality services for mobile network operators, which in turn could end up effecting consumer wallets at the end of the chain.

The CMA is now inviting submissions on its provisional findings by Friday 14 January 2022, ahead of a final decision in March 2022.

“Mobile phones are an essential part of everyday life for people and businesses,” said Richard Feasey, Chair of the independent inquiry group. “This deal may prevent the emergence of a third major national provider of the critical infrastructure on which mobile operators depend, leaving them with only a choice of only two major suppliers. Less competition could mean higher prices or worse terms for both mobile operators and their customers.”

The deal was agreed in November 2020, and represented the latest in a series of purchases for the Spanish firm, which allowed it to achieve huge market share.

The investigation has been rolling on in various phases for some time now, and In September BT joined the chorus to say that should this deal go ahead, it would affect its and its rivals’ access to macro mobile sites, and could well lead to higher prices.

We’ll have to see what the final outcome is in March, but since ensuring open competition in the telecoms space is now something ministers make announcements about, the situation has the potential to get more political.