The UK Government has launched a consultation on options to address rural mobile coverage "not-spots" – these are areas in which only one or two mobile network operators ("MNOs") support coverage, rather than all four. The measures under consultation are aimed at reducing not-spots to enable consumers to make and receive calls and send and receive texts within a combined four-operator footprint. The Government's proposal focuses on 2G (voice/text only), rather than 3G/4G (data).
The Government is in search of the most efficient, cost effective, and ultimately the fastest solution, as it plans to have the additional coverage in effect by the end of 2016.
In short, the consultation examines, and seeks views on, the following four options:
- infrastructure sharing: this would require MNOs to share their infrastructure and equipment within a shared compound, which could take the form of: (a) site sharing; (b) tower sharing; and (c) radio access network ("RAN") sharing. To this effect, the Government would direct Ofcom to vary the terms of existing spectrum licences to include a coverage obligation equal to the combined coverage of the four MNOs;
- reforming Multi-Operator Mobile Virtual Network Operators ("MO-MVNOs"): instead of the current model, which typically sees an MO-MVNO allocate subscribers to a single MNO, this option would see the current agreements between these MO-MVNOs and MNOs extending to cover access to all four MNOs. This could be achieved through the MVNO: (a) connecting preferentially to the RAN of a host MNO and other partner MNOs where the host MNO is not available; (b) connecting to the RAN of the strongest MNO; or (c) reaching agreements with the MNOs on an international roaming basis (using UK numbers), at more favourable prices. To implement this option at a level-playing field, the Government would introduce certain rules on the commercial terms (e.g. using exclusivity provisions);
- national roaming: this would require each MNO to allow other MNOs to roam onto their networks such that any subscribers of an MNO could use the network of another MNO to call and text if their home MNO does not have coverage in the relevant area. This solution could potentially extend to offer the same to MVNOs (e.g. Tesco and Virgin). Whilst the consultation recognises the significant benefits that this could bring to consumers, it does also acknowledge that implementing national roaming on such a large scale is unprecedented, costly and not free of technical challenges; and
- leaving it up to the MNOs and doing nothing: this option suggests that the Government take no action, and allow the current initiatives in play to address not-spots – for example, the infrastructure sharing project between Vodafone and O2 is already in motion. Further, the current Governmental process to select an operator to deploy an emergency services mobile network in the UK could also potentially reduce the extent of the not-spots.
The industry has reacted strongly to the proposals, particularly, in relation to the rather drastic proposal to mandate national roaming. The four operators have stated that any such a solution would likely deteriorate the levels of quality that customers currently receive, and increase prices. More importantly – they argue – regulated national roaming is likely to decrease future investment in mobile network infrastructure and technology, which would ultimately be used to address the not-spots – regulation in this form is highly atypical for competitive market structures.
There has been greater support for the infrastructure sharing solution. Whilst this option would not enable the same scope of coverage as national roaming, this is by far the less costly option. Further, it would provide greater future potential in terms of expanding the solution beyond 2G – to cover 3G/4G and support data in these areas. There is also successful precedent on this solution in the form of the O2-Vodafone network sharing deal.
Ultimately, neither option is free of technical and commercial challenges for operators – operators would prefer to be left alone, without the threat of regulation, to invest and innovate on their networks. Whatever the outcome, the UK mobile communications market is likely to see greater collaboration between network operators in one form or another, which in turn could mean additional revenue benefits (greater for certain options over others), and greater competition and coverage for consumers.
Responses are due in by 26 November 2014.