The sale of the Irish unit of Cellnex, Europe’s largest telecom towers and infrastructure group, to Florida-based Phoenix Tower International for €971 million has been given the green light by the competition watchdog.
The Spanish group entered the Republic in 2019 by buying Cignal, a tower firm with 546 tower sites at the time, including 300 that had been owned by State-owned forestry company Coillte, for €210 million.
It went on to develop more sites and, in 2021, acquired hundreds more towers from mobile phone operator Three Ireland’s owner, CK Hutchison, for about €600 million. The Three sites were part of a wider €10 billion sale of CK Hutchison assets in Europe to Cellnext.
Cellnext manages 1,900 sites in the Republic. There are more than 9,300 mobile base station sites in the State, according to a map on industry regulator ComReg’s website.
Phoenix Tower, founded in 2013 and backed by US investments giant Blackstone, operates more than 29,000 telecom towers throughout Europe, the US, Latin America and the Caribbean. Its European markets include France, Italy, Ireland, Germany, Malta and Cyprus.
It entered the Irish market four years ago with the acquisition of Emerald Tower, which owns more than 650 mobile masts, for €300 million from Eir.
The sale encompassed steel and concrete elements, with Eir and its affiliates retaining ownership of the base stations, antennae and all telecom-related equipment, including fibre.
[ Spain’s Cellnex sells Irish telecom masts unit for €971m to Phoenix TowerOpens in new window ]
The proposed acquisition was originally notified to the Competition and Consumer Protection Commission (CCPC) in March last year.
Following an extended preliminary investigation, the CCPC determined in July that a full investigation was required to establish if the proposed transaction would lead to a substantial lessening of competition in the State.
In the course of its investigation, the CCPC identified potential competition concerns relating to the supply of hosting services on macro passive network infrastructure sites in the State.
Passive infrastructure, which includes towers or masts, is crucial for mobile network operators and other electronic communications service providers. Mobile operators fix active network equipment to it, including antennae and dishes.
The CCPC’s potential concerns included an increase in market concentration through the loss of close competition between Phoenix and Cellnex resulting in higher prices and/or lower service quality for their customers and, ultimately, end users of mobile networks.
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To address these potential concerns, Phoenix made several binding commitments to the CCPC.
These commitments include the divestment of sites in areas where the effect of the transaction would be to reduce the number of competitors offering hosting services on from three to two or from two to one.
The commitments also include a provision to divest new sites to be developed within the same areas, where the new sites are part of an existing agreement between the merging parties and a mobile network operator.
The CCPC said the commitments will allow a competitor to enter or expand in the market and will replace competition lost due to the merger.
“Following detailed examination, and having taken into account the commitments given by Phoenix, the CCPC has determined that the proposed acquisition will not substantially lessen competition and, as a result, can be put into effect,” it said.
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