Three to buy UK Broadband for £250m

Posted February 08, 2017

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 nearly exclusively offered only mobile services to consumers".

PCCW, controlled by Richard Li Tzar-kai, announced on Monday night that it has entered into an agreement to sell its investment holding company, Transvision, to Three UK, a wholly-owned subsidiary of CK Hutchison, which is controlled by Richard Li's father and Hong Kong's richest man Li Ka-shing. Relish is its most well-known brand - a superfast 4G broadband option that covers central London, but the company also operates public sector networks in Reading and Swindon. The firm has often touted this as being a better deal than fixed copper connections.

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".

UK Broadband now has around 15,000 business customers across London, Reading, Swindon and Scunthorpe, who turn to UK Broadband for wireless data capacity, equipment, and services on the network. A deferred £50 million will be made available as a credit toward an MVNO agreement on Three's network. Overall, the company supports 15,000 customers across the UK.

Three, which has been openly critical of United Kingdom regulator Ofcom, has called for spectrum caps as part of the Make the Air Fair campaign it launched previous year alongside rivals including Relish.

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"Three remains in a precarious position as a mobile-only provider in a United Kingdom market rapidly evolving to multiplay services", he said.

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.

UK Broadband Ltd will continue to operate as it does now until the deal is completed.

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 can not be put to immediate use".

However, he said it is likely "to be a key band for 5G services, which will launch in the United Kingdom from 2020".