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 Extension of UK geographic mobile coverage has to be supported by reform of  regulatory framework  

 

A report on the economic impact of reform of the Electronic Communications Code has found rental for mobile phone sites is 30 times that of electricity or water companies. The report by Deloitte, commissioned by the Mobile Operators Association, identified up to £270 million that could be unlocked for investment in improving networks if the Code was updated to ensure fair and proportionate rents.   

John Cooke, Executive Director of the Mobile Operators (MOA) said: “The rental reductions from applying the water or energy regimes, as illustrated in the Deloitte report, to telecommunications providers would be sufficient to increase outdoor coverage to around 99% of the country. This would result in an economic benefit of up to £1.4 billion over ten years for those rural communities with limited or no coverage. Alternatively, the rental reductions could be used to invest in greater capacity, more innovative services or a combination of these.”  

He added: “If the Government were to move towards this type of payment model, it would need to do so with certain qualifications. One would be that network operators do not object to paying fair rents to Wholesale Infrastructure Providers (WIPs) to provide them with a reasonable rate of return on their investment in their infrastructure. The other qualification would be that for other sites, moving to a regime such as outlined in the Deloitte report probably could not happen overnight, but would need to be phased in over a transitional period.“  

“The Government has a stated commitment to making the UK the best connected country in the world. The Government’s Digital Communications Infrastructure Strategy also makes clear that “if the UK is to remain a leading digital economy it needs the right digital communications infrastructure in place to meet user demand, support economic growth, build a digital society and allow new technology to flourish”. This is the litmus test against which reform of the Electronic Communications Code should be judged.”  

Notes to Editors

  1. The Mobile Operators Association (MOA) represents the four UK mobile network operators – EE (including Orange & T-Mobile), Telefónica UK, Three UK, and Vodafone – on radio frequency (RF) health and safety, and related town planning issues associated with the use of mobile phone technology.  

2. The Electronic Communications Code (ECC) regulates the relationship between landowners and fixed and mobile operators. The government has been considering the reform of the ECC for several years.   

3. The MOA commissioned Deloitte in 2014 to review the economic impact of reform of the Electronic Communications Code. The study focused on three scenarios being considered by the DCMS on the rents and the costs payable by mobile operators.  

4. Key Points from the Report: 

•         Reform of the code is not just about rolling out existing spectrum and improving 4G but also providing the basis for the roll out of future innovations such as 5G and the platform for the IoT (M2M).  

•         Deloitte Research commissioned by the mobile network operators (MNOs) has found that the industry pays, on average, £7500 pa in rent for sites in rural areas and £9200 pa in urban areas. In contrast, water and energy companies pay £270 and £280 pa for the same amount of land – on average  a staggering 30 times less.

 •         Almost half of all MNO network sites generate less revenue than they cost to maintain. In this context, it is difficult for operators to justify further network expansion to increasingly unprofitable locations.  

•         If the regime currently applied to water and energy companies were to be applied to mobile, this would unlock up to an additional £271 million in annual rent reductions.  

5. The DCMS announcement on the agreement to extend coverage to 90% UK geographic area can be found at:  

https://www.gov.uk/government/news/mobile-operators-sign-up-to-coverage-improvements     

The DCMS Digital Communications Infrastructure Strategy consultation: https://www.gov.uk/government/consultations/digital-communications-infrastructure-strategy-consultation   

The DCMS Reforming the Electronic Communications Code consultation: https://www.gov.uk/government/consultations/consultation-on-reforming-the-electronic-communications-code