UK mobile phone operators agree to invest £5bn to improve coverage

Government brokered deal guarantees operator investment into UK’s mobile infrastructure to boost coverage and signal strength for voice and data services in partial ‘not-spots’

UK mobile phone operators agree to invest £5bn to improve coverage

UK Culture Secretary Sajid Javid today (18 December 2014) announced a landmark deal with the four mobile networks to improve mobile coverage across the UK.

As part of its long-term economic plan, the Government has secured a binding agreement with the mobile networks EE, O2, Three and Vodafone to tackle poor signal issues in so-called ‘partial not-spots’.

These are areas within the UK that have coverage from some but not all of the four mobile networks. Depending on the network consumers are on, they may have no coverage in these areas.

Under the agreement all four of the mobile networks have collectively agreed to:
• a guaranteed £5bn investment programme to improve mobile infrastructure by 2017;
• guaranteed voice and text coverage from each operator across 90% of the UK geographic area by 2017, halving the areas currently blighted by patchy coverage as a result of partial ‘not-spots’;
• full coverage from all four mobile operators will increase from 69% to 85% of geographic areas by 2017;
• provide reliable signal strength for voice for each type of mobile service (whether 2G/3G/4G) – currently many consumers frequently lose signal or cannot get signal long enough to make a call; and
• make the deal legally binding by accepting amended licence conditions to reflect the agreement – it will be enforceable by Ofcom.

No cash payments will be made by Government to the mobile networks as part of this agreement.

This deal will also result in cutting total ‘not-spots’ where there is currently no mobile coverage by two-thirds. This will support the Government’s existing £150m programme to take mobile coverage to the areas of the UK that have no coverage at all.

As a result of the agreement, many areas will receive better data coverage, some for the first time. During the recent consultation process, consumers made it very clear that they feel any solution should include better data coverage.

Culture Secretary Sajid Javid said: “I am pleased to have secured a legally binding deal with the four mobile networks. Too many parts of the UK regularly suffer from poor mobile coverage leaving them unable to make calls or send texts.

“Government and businesses have been clear about the importance of mobile connectivity, and improved coverage, so this legally binding agreement will give the UK the world-class mobile phone coverage it needs and deserves. The £5bn investment from the mobile networks in the UK’s infrastructure will help drive this Government’s long-term economic plan.”

Whilst discussions with the mobile operators on a voluntary solution continued, the Government consulted on various legislative options in November 2014 to ensure that the issue of poor mobile coverage was addressed. This voluntary binding agreement secures a better deal for consumers and businesses as it:

• will halve partial not-spots and reduce complete not-spots by almost two-thirds;
• guarantees £5bn investment by mobile networks in the UK’s mobile infrastructure – potentially creating jobs and a boost for the UK economy;
• provides some of the best coverage of any major European country – underpinning the Government’s long-term economic plan.

As part of the agreement, the Government:

• will bring this agreement to the attention of Ofcom in the context of their work to revise Annual Licence Fees – this is the subscription fee mobile networks pay Government;
• intends to reform the out-dated and ineffective Electronic Communications Code to make it easier for the whole communications sector to rollout out new mobile and broadband services, and increase choice for consumers; and
• is allowing many of the Government’s freehold buildings to be used as sites for mobile infrastructure – potentially opening up hundreds of sites to boost mobile coverage, including areas where is has been previously difficult to rollout network coverage.

EE CEO Olaf Swantee said: “EE is focused on bringing the best voice and data service to its customers across the UK, and only last week announced 1,500 unconnected villages will soon benefit from EE coverage. This agreement ensures that our customers are able to stay connected in even more places up and down the country.”

Derek McManus, COO of O2, said: “A partnership between government and the mobile operators is required to maximise coverage across the UK, so this agreement is a good outcome for our customers. It will support investment in our network, while ensuring that strong competition remains between the different networks.”

Dave Dyson, chief executive of Three, said: “We’ve doubled the size of our network in the past five years and we continue to invest to maintain a great network experience for our customers. Today’s agreement reflects the strength of our network today, our plans for the future and our commitment to bring its benefits to more people and more places than ever before.”

A Vodafone UK spokesperson said: “We support the Government’s objective of delivering better coverage to rural areas including partial not spots. This is why Vodafone is already spending £1 billion on our network and services in the UK this year alone and will continue to spend a similar amount next year as well.

“The voluntary industry commitment we have agreed with the Government today will deliver 90% of the UK’s land mass with voice services and a major improvement in mobile internet coverage as well. It is a great result for UK consumers and businesses and it will make the UK a leader across Europe in terms of the reach of mobile coverage.”

Mobile networks will now take forward their plans to improve mobile coverage and Ofcom will monitor progress regularly. The Secretary of State expects the operators to meet an interim goal in 2016, and will be receiving updates on this.

 

Solution better than Government’s ‘national roaming’ proposal
Matthew Howett, principal analyst, regulation at Ovum, commented: “While the UK government’s once preferred solution of ’national roaming’ to deal with mobile not-spots sounded attractive to those with coverage issues, it was a messy solution that has fortunately been abandoned.

“Instead, operators have agreed to work collectively to deliver improved geographical voice coverage (rather than population coverage), of 90% by 2017. The deal-maker? A re-evaluation of the ongoing spectrum license fees to reflect the value of the coverage target has become more onerous.

“The cost, complexity, and side effects of national roaming made it such an unworkable fix that it really should never have made it into the list of possible options. While it works as a concept when you travel abroad, it wasn't a solution to dealing with poor mobile coverage domestically.

“Aside from the cost, potential side effects include reduced battery life, and, for some customers, even losing data services altogether for prolonged periods. It also didn’t attempt to address poor data coverage, but only problems with 2G voice services.

“As Ovum argued at the start of the consultation, what needed to happen was for the mobile operators to work collectively with government to come up with an agreeable fix that addressed not only poor voice coverage, but also data too.

“Thankfully common sense has prevailed and this is what consumers are set to benefit from. The operators were always themselves in the best position to improve coverage, something which had been the case given that mobile spectrum auctioned last year at 800MHz is particularly well suited to covering large and more rural areas, and they are only just starting to make use of those airwaves.

“The eventual solution had to continue to incentivise operators to invest in rolling out networks, which is already happening at a far quicker pace that anticipated just a few years ago, and with considerable investment.

“The annual spectrum licence fees were always likely to be used as a bargaining chip. While not ever directly linked to the not-spots consultation, it has been an ongoing battle between government, regulator, and industry ever since the original 2G spectrum was liberalised for other uses back in 2009 and the fees needed to be readjusted to reflect the new value of that spectrum.

“While Ofcom had already gone back on the planned fee hike, its hands were tied in respect to bringing them down any further. Now it looks set for the government to direct Ofcom to reconsider (hopefully for the last time), the value of that spectrum now that it comes with a higher coverage burden,” concluded Howett.

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