Mobile carrier Three UK has announced it’s acquisition of UK Broadband for $373 million.
The deal consist of £250 million up front with “a deferred £50 million, made available as a credit toward an MVNO agreement on Three’s network”, Three said in a statement.
Dave Dyson, Chief Executive of Three UK, said: “UK Broadband gives us an opportunity to expand our ambition to provide high quality and great value internet connectivity for UK consumers.”
Three UK is currently owned by CK Hutchison, which has mobile holdings around the world, including Australia, Europe, and Hong Kong. The UK mobile division is among one of the youngest mobile networks in the country and wasn’t active until 3G was made available in the UK in 2003.
Today, Three makes up for 35% of UK mobile traffic but only has 9.2 million subscribers, making it one of the smaller providers, compared to EE which has roughly 31 million.
The news comes as Three continues its plan to acquire more spectrum, just last year a merger deal with mobile provider O2 was prevented from going through by EU regulators over concerns that it would push prices up for consumers.
UK Broadband Limited provides broadband access to 15,000 customers in the UK and would become a wholly owned subsidiary of Three UK. The company also states that it is “the largest commercial holder of national radio spectrum suitable for 4G mobile services and fixed wireless solutions in the UK.”
The deal is expected to be finalised later this year though it is not known if UK Broadband will continue to operate. Three says that the deal was made primarily to support consumers with next gen services, such as broadband and IoT application access.
Kester Mann, Principle Analyst, Operators at CCS Insight, said: “The move represents a tentative step into the home broadband and public sector market for a company which, up until now, has almost exclusively offered only mobile services to consumers.”
“Although Three will acquire new spectrum, the acquired band is not compatible with most of today’s mobile devices, meaning that it cannot be put to immediate use.”