Mobile operator Three UK is looking to finalise a £300 million deal to acquire UK Broadband, the company behind wireless operator, Relish.
In order for UK Broadband to become a fully owned subsidiary, Three UK is set to pay £250 million in cash as part of the deal and will make a further £50 million available as credit towards a mobile virtual network operator agreement on Three’s network.
Three UK’s chief executive Dave Dyson said:
“UK Broadband gives us an opportunity to expand our ambition to provide high-quality and great value internet connectivity for UK consumers.”
Reports first emerged last autumn suggesting UK Broadband was holding talks with some of Britain’s mobile operators in the hope of expanding its network. This announcement comes almost a year after the European Commission formally blocked Three’s parent company CK Hutchison Holdings from a £10.3 billion takeover of O2.
EU antitrust regulators argued the takeover of O2 would have meant higher prices and less choice for UK consumers.
Three UK, a subsidiary of Hutchison, run by Hong Kong billionaire Li Ka-shing, carries around 35% of the UK’s mobile data traffic and employs 5,000 staff across the country. Relish, owned and operated by UK Broadband Ltd is a mobile broadband provider based in London. It supports 15,000 customers across the UK. This deal gives Three UK access to additional spectrum of around 40MHz across the 3.4GHz, 3.6GHz, 3.9GHz bands. This spectrum cannot currently be used for mobile services, but has been earmarked as possible bands for 5G.
Three has already complained about the distribution of spectrum holdings in the UK, launching a campaign challenging Ofcom CEO Sharon White to “Make the Air Fair”. The campaign, launched last year, included a petition which has received more than 200,000 signatories.
In the campaign, Three accused BT and Vodafone of harming competition by holding on to a high proportion of spectrum, some of which the Hutchison subsidiary claims is being left unused.
This deal also marks the expansion of Three’s mobile based, fixed line replacement service, launched last year as ‘Home-Fi’. The company aims to offer home Wi-Fi services in areas with poor internet connectivity using Three’s additional mobile service.
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