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Three to buy UK Broadband for £250m

Monday, February 6th 2017 by Phil Wilkinson-Jones

Mobile operator Three is to buy UK Broadband, the company behind London-based 4G broadband provider Relish.

The move signals a first step into fixed broadband for the firm, but could also help Three improve the capacity of its mobile network, according to analysts.

Three will pay £250m for UK Broadband, which provides broadband access to 15,000 customers in the UK across its brands.

Dave Dyson, Three’s chief executive, said: “UK Broadband gives us an opportunity to expand our ambition to provide high quality and great value internet connectivity for UK consumers.”

Three said the deal is subject to "the fulfilment of a number of conditions before completion can take place" but expects to complete the process in the summer.

Matthew Howett, a telecoms analyst for media research firm Ovum, said the deal is “interesting from a spectrum point of view”.

Three has been vocal about the amount of spectrum – the airwaves used to deliver mobile services – owned by rivals EE and Vodafone, and has been campaigning for Ofcom to impose a limit on how much one company can own.

Mr Howett told Cable.co.uk: “UK Broadband has a fairly large holding at 3.4GHz, which is a band Ofcom are planning to award jointly with the 2.3GHz band.

“Whilst not immediately usable in the traditional mobile sense, it’s is going to be important for capacity which is something Three is known to be keen to address.”

Ofcom, in its consultation on the upcoming spectrum auction, said UK Broadband’s spectrum share “potentially gives O2 or [Three] another option in terms of increasing their capacity”, adding: “This tends to reduce our competition concerns.”

John Delaney, a mobile analyst for IDC, tweeted that UK Broadband also owns spectrum in a band likely to be used in the rollout of 5G services.

Three’s announcement comes months after the European Commission blocked the operator’s attempted takeover of O2.

Three had promised to freeze its prices for five years and invest £5bn in the businesses should the takeover go ahead.

But both Ofcom and the Competition and Markets Authority (CMA) voiced concerns over the deal and it was ultimately stopped by the Commission, which said it would have been “bad for UK consumers and bad for the UK mobile sector”.

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