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UK rural collaboration back on the table

Tower outsourcing is increasingly popular

Getting competitors to work together for the greater good is a complex and often failed task, but the latest effort to address ‘not spots’ in the UK is holding steady.

Following a meeting with the Department of Digital, Culture, Media and Sport, the CEOs of the four major UK MNOs have agreed, in theory, on a collaboration plan which will address the not spots in the UK. For those languishing in the rural regions of the UK, this news will come as a welcome boost to digital ambitions.

However, what is worth noting is this is not a done deal. Collaboration plans have fallen apart in the past, and there is still plenty of room for error.

The plan itself is one which is built on the idea of reciprocation. Instead of forcing the telcos to open up infrastructure to competitors, an idea which would be more beneficial to certain parties, or imposing a ‘national roaming’ initiative, the telcos are discussing two separate and parallel paths forward.

Firstly, one competitor would open up infrastructure to another should the same be done in return. This would reward telcos for (1) investing in the rural communities and (2) working alongside a rival. Building a mast could compound coverage gains with reciprocal agreements. This is more for the areas where users have limited choice in providers.

Secondly, the areas which do not fall into the footprint of any telco. The four telcos are proposing the creation of a new company which would focus on building infrastructure in the not-spots. This infrastructure would be accessible to all telcos, potentially filling-in the digital voids throughout the countryside.

According to the latest statistics from Ofcom, 78% of the UK population can now receive a ‘decent’ 4G signal from all operators, while 78% of the UK geography is covered by all four telcos for calls. Decent 4G coverage from a geographical perspective is 67%, while the watchdog has deemed 8% of the landmass as not-spots. Addressing the not-spots would be the objective of the new company.

In terms of the reciprocal agreement, this seems to be addressing concerns over a lack of competition in certain markets across the UK. Due to investment plans and demand, there are various different corners of the UK which are only covered by single telcos, reducing choice for consumers. Placing coverage obligations, or enticing the telcos with spectrum discounts, have been tactics to improve the breadth of coverage across the UK, though the reciprocal agreement seems to be a sensible way forward.

This would appear to be similar to proposals put forward by BT back in back in March. At the time, BT was being chastised for snubbing a collaboration plan put forward by its trio of competitors (Vodafone, O2 and Three) which would open up all infrastructure in regions only served by one telco. This would have effectively rewarded the trio for inactivity in by-gone years and removed the BT/EE competitive edge on coverage.

The reciprocal plan is one which rewards a telco for making investments in rural communities and also adds a compounding element to increasing coverage across the underserved areas.

However, while all these plans sound reasonable, it is now down to DCMS and Ofcom to agree.

The reciprocal deal would be funded by industry itself, while the not-spots company would be aided by contributions from government. These contributions could come in the form of discounts to existing annual license fees, potentially as much as £200 million for each telco per annum. The plans would also be contingent on the removal of some/all coverage obligations placed on the telcos during 5G auctions.

This is where the plan could begin to unravel. As industry has already shown its preference to investing in more commercially attractive regions, cities and large towns for example, the removal of coverage obligations could lead to a precarious position.

“We want people and businesses to get better mobile coverage as quickly as possible,” said an Ofcom spokesperson. “We’ve proposed new rules that would require mobile companies to extend their networks to rural areas. We’re encouraged to see mobile companies working together on proposals to improve coverage and would consider carefully any firm plans from industry.”

While the industry is certainly saying the right things to catch the attention of DCMS and Ofcom, the fine print is where the deal will be made or tarnished. Theoretically the plan sounds good, but government officials will still want reassurances coverage will be extended to all corners of the UK; the telcos have shown they will not do this on their own.


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