Following what it describes as a thorough investigation, the UK’s Competition and Markets Authority (CMA) has cleared the £2 billion (€2.2bn) merger between Cellnex UK and Arqiva’s telecommunication infrastructure division, finding that the deal does not raise competition concerns in the supply of large telecommunication infrastructure such as mobile towers and pylons.
It suggests that Cellnex is only a small player in this market at present and competition between the two companies has been limited. While the CMA has carefully considered whether Cellnex was in the process of expanding its UK presence before the merger, it ultimately found that Cellnex would not have been a significantly stronger competitor if it had not bought the Arqiva business.
The CMA also found that, following the merger, the combined business will continue to face competition from several other independent providers, including WIG and Freshwave Group. Major customers such as mobile network operators can also continue to use their own existing infrastructure sites, or develop their own new sites, as they do for the majority of their demand at present.
In addition, the CMA examined whether the deal would lead to a loss of competition in the future in the supply of ‘small cell’ telecommunication infrastructure, which is expected to be particularly important for 5G roll-out. Again, Cellnex is not a significant presence in this market at present, but the CMA carefully considered whether it was in the process of expanding to compete more strongly. Ultimately, the CMA did not find concerns because Cellnex’s plans were modest and the presence of a number of emerging companies and alternative technologies mean that customers will still have a significant amount of choice even after the merger.
To reach its conclusions, the CMA assessed a wide range of evidence and actively engaged with key players in the telecoms sector, including mobile network operators and Ofcom. The CMA also considered how ongoing market developments, such as the anticipated UK-wide roll-out of 5G and the Shared Rural Network project – which aims to improve mobile coverage in rural areas – might affect its assessment.
“Arqiva is now fully focused on strengthening its position as the UK’s Number One broadcast and M2M infrastructure solutions provider, particularly at a time when these critical services are showing their value and relevance so strongly.”
“The green light from the CMA is a crucial and decisive boost for the final closure of the acquisition of Arqiva’s Telecommunications division over the coming months and is aligned with the forecasts with which we were working when we announced the operation,” said Cellnex CEO Tobias Martinez.
“This acquisition is a key milestone for Cellnex,” he added. “Its strong UK asset-base, revenues and financial profile, combined with its long history at the heart of UK digital infrastructure, make it a perfect addition to our UK-based operations.”
“The UK has always been a core component of Cellnex’s inorganic expansion plans in Europe. This deal is further proof of this, and of the company’s confidence in the UK market which, once the operation is concluded, will become one of Cellnex’s principal operations.”
“It provides a significant opportunity to support the extension of a mobile network fit to match the country’s ambitions,” he advised. “We are ideally placed to bring our operational expertise and innovative approach to bear in a context where the Government and regulators are looking to encourage greater connectivity for all citizens and businesses through network development.”