After getting its proposed merger with O2 blocked by regulators last year, today Three UK announced another strategy to increase its presence in the market, specifically by growing spectrum capacity. The carrier is acquiring UK Broadband in a transaction valued at £300 million ($373 million) — £250 million up front with “a deferred £50 million “made available as a credit toward an MVNO agreement on Three’s network.”
The transaction is expected to close mid-year, Three said.
Adding more spectrum is a priority for Three especially in the wake of its O2 merger attempt getting scuppered. Three UK — owned by CK Hutchison Holdings, which also has stakes in mobile operations in Australia, Austria, Denmark, Hong Kong, Indonesia, Ireland, Italy, Macau, Sri Lanka, Sweden and Vietnam — is the youngest of the UK’s major mobile carriers: it came to life only with the UK turning on 3G, and it then picked up users with cheap unlimited or high-cap data plans.
As a result it’s also the most data-forward: today its network carries 35% of the UK’s mobile data traffic. But 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 (which says around 31 million across mobile, fixed and wholesale).
UK Broadband — which was owned by another Hong Kong telco, PCCW — 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.
UK Broadband currently has around 15,000 business customers across London, Reading, Swindon and Scunthorpe under the Relish brand for retail services. UK Broadband sells wireless data capacity, equipment, and services on its network. Customers include service providers, channel partners and the public sector.
It’s not clear whether that business will continue after the transaction is closed — which is expected in the middle of year. Three, for now, 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 IoT along with other 5G services.
“UK Broadband gives us an opportunity to expand our ambition to provide high quality and great value internet connectivity for UK consumers,” said Dave Dyson, CEO of Three UK, in a statement.