Three UK has acquired UK Broadband Ltd for £250 million as it adds a home broadband service and new spectrum to its mobile-only offering.
UK Broadband, which switched on the country’s first commercial 4G network in 2012, is owned by Hong Kong-based IT, media and telecoms group PCCW.
The business owns London-based fixed-wireless broadband provider Relish as well as a range of LTE spectrum holdings.
It has 15,000 customers in the UK.
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.”
As part of the deal, a deferred £50 million will be made available to PCCW as a credit toward an MVNO agreement on Three’s network.
Should it get the regulatory green light, UK Broadband will become a wholly owned subsidiary of Three UK.
The mobile operator gets its first, limited slice of the home broadband market as a result of the deal, but CCS Insight Analyst Kester Mann warned it would do little to help its cause in that regard.
“Three remains in a precarious position as a mobile-only provider in a UK market rapidly evolving to multiplay services,” he said.
Instead, it is arguably the acquisition of spectrum that is more significant.
Three, which has been openly critical of UK regulator Ofcom, has called for spectrum caps as part of the Make the Air Fair campaign it launched last year alongside rivals including Relish.
It claims to carry more than 35 percent of the UK’s data traffic but notes that EE and Vodafone own almost 75 percent of the country’s mobile frequencies between them.
Mann said that the UK Broadband deal would remove a rival bidder from the UK’s next spectrum auction, slated for later this year.
“UK Broadband was almost certain to take part given its aspirations to expand its service beyond London, Swindon and Reading,” he said.
But Mann also noted: “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.
“It is likely to be a key band for 5G services, which will launch in the UK from 2020.”