Trade body Mobile UK, which represents network operators Three UK, EE (BT), O2 (Virgin Media) and Vodafone, has today published a new report that warns “widespread adoption of 5G [is] at risk of being missed” unless the government makes changes to help deliver 5G (mobile broadband) upgrades.
Regular readers will note that this isn’t the first time Mobile UK have pleaded for the Government to do more to support their network upgrades. In fact, they said much the same thing just before this month’s Spring Budget 2024 announcement (here), which appears to have fallen on deaf ears (judging by the lack of positive support in the budget).
According to the new and somewhat high-level report – ‘Rebalancing Act: Unlocking the potential of the UK’s Mobile Industry‘ – mobile technology is estimated to generate £5 of value for every £1 invested by mobile operators, while 5G networks have the potential to provide a £159bn boost to the UK economy by 2030.
However, the report also warns that government targets, like the goal of reaching “all populated areas [with] ‘standalone’ 5G (5G-plus) [technology] by 2030” (here) are at potential risk of not being met. 5GSA is the next evolution of 5G mobile technology, which is a true end-to-end 5G network that can deliver improvements such as ultra-low latency times (faster), greater energy efficiency, faster upload speeds, network slicing capabilities, improved support for Internet of Things (IoT) devices, increased reliability and better security.
The Digital Connectivity Forum (here) has previously also identified a related £25bn investment gap, which operators are trying to fill.
Hamish MacLeod, CEO of Mobile UK, said:
“It’s clear the industry is delivering strong value through the generation of £5 return to the wider economy for every £1 invested by the operators, and so enabling a positive investment environment for the sector must be the clear priority of government,” said Hamish MacLeod, CEO of Mobile UK.
As a country we are not making enough progress to meet the objectives of the Wireless Infrastructure Strategy which acknowledges the power of mobile technology and the ambition to be a leader in 5G.
Reductions in spectrum licence fees, reforming traffic management regulations and Business Rate holidays for new mobile infrastructure would incentivise investment. In addition, adequately funding the planning system and appointing digital champions in local authorities would help streamline network rollout and get the UK back on track to achieve its targets.”
Naturally the report, which suggests that the UK is currently far from being a leader in 5G (various network performance and coverage studies do tend to indicate that the country is a 5G laggard), proposes a series of recommendations to help address the problem.
The Recommendations
• Recommendation 1: At a minimum, following through on policies and actions outlined in the Wireless Infrastructure Strategy – such as reducing annual licence spectrum fees to stimulate investment, reforming the traffic management regulations and driving demand in the public sector.
• Recommendation 2: Explore further policy actions designed to remove barriers to network rollout – including adequate funding of the planning system, the implementation of Digital Champions within local authorities to promote the rollout and adoption of digital technologies, and further reform of permitted development rights.
• Recommendation 3: Implement fiscal measures that will have a direct and immediate impact on improving MNO investment outlook – including Business Rates holidays for new mobile infrastructure.
• Recommendation 4: Consider further actions that can be taken to support private capital being deployed in the UK by mobile operators – taking into consideration significant interventions in other territories (such as the Inflation Reduction Act in the US and the Resilience and Reconstruction Fund in the EU) and the need for operators to offer competitive returns to investors.
Sadly, we can see some potential problems with these ideas. Firstly, both the government and Ofcom have traditionally been reluctant to slash licence fees, particularly at a time when they’re already having to deal with a significant strain on public finances. Predictably, we can also observe the usual attempt to weaken the Net Neutrality protections for internet access, which was recently tackled by Ofcom (here) – any bigger changes would require tedious new Government legislation.
As for softer planning rules, we’ve already seen some positive developments on this front, such as changes to support taller masts and making it easier to upgrade existing sites via Permitted Development (PD) rights. But one difficultly for the government is that they have to balance such demands against issues of public opinion (i.e. new mobile masts and poles often attract complaints), which is much more relevant in an election year.
The idea of a business rates holiday on new mobile infrastructure is another fairly familiar call, although it tends to be a complicated solution (the Valuation Office Agency is not the easiest of organisations to deal with) and there may thus be better approaches that could be taken to help incentivise a similar outcome.
The reality here is that the Government might prefer to wait until after both the Vodafone and Three UK merger (assuming it’s approved and that’s not guaranteed), as well as the next round of 5G friendly spectrum auctions, have gone through before considering what other changes may be needed. The catch is that we may well have a very different government by then, which may be either more or less receptive to the operators’ demands.