Cellnex has closed the Italian portion of its European towers mega-deal, adding over 9,000 sites to its growing European footprint.
The Italian component of Cellnex’s €10 billion acquisition of CK Hutchison’s European towers assets is particularly significant because it raised some serious regulatory questions; specifically, Italy’s competition watchdog, the Autorità Garante della Concorrenza e del Mercato (AGCM), expressed concern that the deal would leave too much market power in the hands of one player.
The AGCM questioned in particular the impact of the acquisition on the market for providing hosting to third parties, noting that having subsumed CK Hutchison’s towers, Cellnex Italia would boast a 70% market share. It also highlighted the fact that the market’s other major player Inwit exerts limited competitive pressure due to the fact that it is a JV between TIM and Vodafone, and therefore potentially has little impetus to offer third-party hosting.
However, it green lighted the deal a fortnight ago, subject to certain conditions. Chief among these is a requirement that Cellnex make available a certain number of sites in municipalities of fewer that 35,000 inhabitants to new mobile operators (licensed in the last five years, which essentially means Iliad) and fixed wireless access providers at market conditions.
Cellnex has not split out the cost of each European market included in the CK Hutchison deal, but it is clear that Italy is one of the biggest. The deal covered around 24,600 sites in total – rising to 30,000, including some yet to be deployed – in six markets. Italy brings 9,100 new sites an increases Cellnex’s footprint in the market to 20,000 towers, plus a further 3,000 in the pipeline for rollout by by 2030, and 2,194 distributed antenna system (DAS) nodes.
Cellnex has now closed five of the six markets included in the CK Hutchison deal, giving it 18,600 new towers in Austria, Denmark, Ireland and Sweden, as well as Italy. The remaining 6,000 are in the UK, where authorities have yet to give the deal the go-ahead.
The UK’s Competition & Markets Authority (CMA) is currently examining the proposed transaction, like the Italian watchdog having identified a risk to market competition. It is due to rule on whether the deal requires a Phase 2 investigation in the next couple of weeks.
Cellnex said it expects to close the deal in the first half of next year, which should leave plenty of time for the competition body to do its thing.
In the meantime, it has plenty to occupy itself with elsewhere in Europe, where its portfolio of assets, including those in the planning stages, is pushing 100,000 sites. In a market in which scale makes a difference, Cellnex is heading in the right direction.