Three’s £250m acquisition of loss-making UK Broadband shows the operator has a large appetite for spectrum, but it will be the forthcoming spectrum auction where the land-grab for frequencies will really take place.
Hong Kong owner of Three, CK Hutchison, purchased UK Broadband this week (which also runs the Relish brand in London), and at first this looked surprising. The company has just 15,000 customers and made a loss of £25.07m on revenue of £3.2m for the full-year 2015.
However, UK Broadband claims to be the single largest holder of commercial spectrum in the UK, with 300MHz of its 2.3GHz of spectrum holdings being identified for both 4G and 5G, including in the 3.6-4.0GHz range.
That will be a welcome boost to Three's spectrum portfolio, which it has been keen to beef up for some time. In 2015, it acquired a chunk of Qualcomm's spectrum.
But while the latest deal will help alleviate Three’s concerns over a capacity crunch in the lower band, it will only plug the gap so far. Matthew Howett, analyst at Ovum, notes most of the acquired frequencies won't come into play until 2020.
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