European infrastructure company Cellnex dismissed initial findings by the UK competition watchdog suggesting a proposed takeover of CK Hutchison’s tower assets could result in higher mobile costs, highlighting pro-competitive benefits from the deal.

Cellnex stated the planned acquisition will create incentives which will unlock, enhance and extend mobile coverage, including 5G, across the country.

Claiming the deal was “strongly pro-competitive”, it added it will engage with the UK’s Competition and Markets Authority (CMA) to address its recommendations on ways to alleviate concerns over anticompetitive behaviour and to suggest “practical alternative remedies” for the regulator to consider.

In its provisional findings, announced in a separate statement, the CMA explained the tower deal “may raise significant competition concerns”.

It highlighted the sale of the CK Hutchison could have been made with an alternative buyer rather than Cellnex, to prevent harming competition by creating “a duopoly” in which the tower company and other supplier Cornerstone Telecommunications Infrastructure would account for more than 90 per cent of the market.

The UK authority also expressed concerns the deal between Cellnex and CK Hutchison may result in higher prices or lower-quality services for mobile operators, and negatively impact users.

Richard Feasey, chair of the independent inquiry group at the CMA, commented the proposed acquisition could “prevent the emergence of a third major national provider of the critical infrastructure on which mobile operators depend, leaving them with only a choice of only two major suppliers”.

The CMA has suggested possible remedies to the companies and they have until 7 January 2022 to address its concerns. A final decision is due by 7 March 2022.