Fresh Delay and Funding Concerns Hit Plan to Extend UK 4G Mobile Coverage

The fate of the government’s £150m Mobile Infrastructure Project (MIP), which aims to help “at least” 98% of UK people gain access to a Mobile Broadband (3G or 4G) service by the end of 2017, is still hanging in the balance after the deadline for agreement passed last month.

Ofcom originally intended for the 4G auction to include a softer coverage target of around 95% but this was later enhanced following a campaign by the Conservative MP for Penrith (Cumbria), Rory Stewart, whom won a debate last year to have it extended. The move had been opposed by Ofcom over fears that mobile operators would simply end up paying less in the 4G spectrum auction.

The Mobile Infrastructure Project (MIP) was thus setup to help the “5 to 10% of consumers and businesses that live and work in areas of the UK where existing mobile coverage is poor or non-existent” and would have required any participating mobile operators to build new mobile masts and related infrastructure in remote rural areas. Stewart originally estimated that the cost of such work would be closer to £215m, which is well above the official commitment.

But cracks in the MIP began to show when, in August 2012, it was revealed that mobile operator Three UK, which was originally expected to foot most of the bill in exchange for a slice of the lucrative 800MHz (4G) band, chose not to take part because it couldn’t meet the requirements. At the time Three UK pledged to re-examine the situation post-auction, which is difficult to do when the commitment itself is technically part of the auction itself.

As a result the government had to scale part of its ambition back and would instead extend mobile coverage to reach just 60,000 premises (900,000 currently don’t have full coverage), which would also include some of the worst affected road routes. But today’s FT (paywall) reports that talks with EE, Vodafone and O2 over how to fund the project have failed to reach an agreement and are continuing past the original mid-November deadline.

A DCMS Spokesman said:

“[The MIP] stands to see tens of thousands of people with poor or non-existent mobile coverage benefit across the UK. [It] is unique in terms of scale and we have been working intensively with the mobile network operators in order for it to proceed smoothly. We have now secured EU state aid clearance and will continue working constructively with the MNOs to enable delivery.”

The current proposal would see the government fund the cost of building the new masts itself, although the three remaining mobile operators would need to fund the upkeep of the new network themselves; this is estimated to cost around £25m every four years.

An agreement is believed to be possible but few expect it to happen this year, which could potentially damage all the recent effort that went into moving the 4G spectrum release forward by almost 6 months. This was done to stop some of the markets main mobile operators from delaying the process further through legal challenges.