After an unfortunate incident featuring an O2 merger being blocked by regulators just last year, Three UK announced today that it’s not backing down, coming up with another way to stay on top of its game in the market: by enhancing spectrum capacity.
The mobile carrier plans to acquire UK Broadband in a transaction valued at £300 million ($373 million) — with £250 million being paid up front, and “a deferred £50 million “made available as a credit toward an MVNO agreement on Three’s network.”
According to Three, the transaction should close by the middle of the year.
As mentioned before, adding more spectrum becomes all the more important for Three in light of its previous merger block. Owned by CK Hutchison Holdings, and boasting stakes in mobile operations in Australia, Austria, Denmark, Hong Kong, Indonesia, Ireland, Italy, Macau, Sri Lanka, Sweden and Vietnam, Three is the youngest of the UK’s major mobile carriers, setting up as late as when 3G came to the UK, subsequently reeling in users with cheap unlimited or high-cap data plans.
Since it is so recent, it stands to reason that it is also the most data-forward: today, its network carries 35% of the UK’s mobile data traffic. However, in terms of size, it’s also the smallest, with around 9.2 million subscribers, compared to others like Vodafone (around 18 million) and O2 (around 25 million) and EE (quoting 31 million across mobile, fixed and wholesale).
UK Broadband claims to be “the largest commercial holder of national radio spectrum suitable for 4G mobile services and fixed wireless solutions in the UK.” It also owns a fiber network for backhaul.
Currently, UK Broadband holds some 15,000 business customers across London, Reading, Swindon and Scunthorpe, who look to them to provide wireless data capacity, equipment, and services on the network. Customers include service providers, channel partners and the public sector.
Whether or not that business will go on after the transaction is done and dusted is still not clear. For now, Three says the deal was made to increase its own capacity in the UK and offer next-generation services to its customers, including broadband access and some IoT services. Dave Dyson, CEO of Three UK, said in a statement:
UK Broadband gives us an opportunity to expand our ambition to provide high quality and great value internet connectivity for UK consumers.