Competition fears for mast merger

The UK is in the process of switching to digital broadcasting

The takeover of National Grid's broadcast masts by Macquarie Bank could lead to higher prices for broadcasters, according to the regulator.

The Competition Commission said the merged company was the only provider of transmission services for terrestrial TV and the majority of radio stations.

The takeover by the Australian bank could also lead to worse service for broadcasters, the commission said.

The £2.5bn takeover was announced in April 2007.

Macquarie already owned many of the UK's broadcast masts through its company Arqiva before its acquisition of the National Grid's mobile phone and broadcast mast operations.

No alternatives

"The merged company will be the only company providing managed transmission services and network access for terrestrial TV, and for the majority of radio stations," said Diana Guy, chair of the inquiry.

"There are no realistic alternatives for TV, and the choices for radio are very limited."

The commission will discuss possible remedies with the merged companies and other interested parties.

When the takeover was announced the firms said it would help smooth the transition from analogue to digital broadcasting, which is due to take place by 2012 .

National Grid runs 4,500 miles of power lines and 4,300 miles of gas pipelines in the UK, and wanted to get rid of the transmission business to concentrate on its core businesses.

The company said it would use £1.8bn of the sale price to buy back its own shares.

Hampshire-based Arqiva has 2,300 masts and towers across the UK and Ireland. It also has operations in mainland Europe and the US.