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Doubts Cast Over Plan to Extend UK Mobile Broadband Coverage to 98%

Tuesday, August 14th, 2012 (10:43 am) - Score 456

Serious doubt has been cast over the viability of the government’s £150m Mobile Infrastructure Project (MIP), which aims to make Mobile Broadband and voice services available to “at least 98%” of the United Kingdom by the end of 2017 (currently 95%), after Three UK chose not to sign-up.. yet.

The project is a vital part of Ofcom’s forthcoming auction of “4G” (Long Term Evolution) based superfast Mobile Broadband spectrum (800MHz and 2.6GHz). The auction itself has already suffered from various delays and legal threats (here), as mobile operators jostle for the most competitive edge over their rivals, and will now take its first bids during “early 2013” instead of Q4-2012.

Unfortunately Three UK has since told government officials that it will not take part in the related MIP, which would require the building of new masts and infrastructure in rural areas where there is little or no commercial incentive for operators to do so, because it allegedly doesn’t have enough spectrum to deliver a good service.

At the MIP’s launch last October 2011 (here) the government’s Department of Culture, Media and Sport (DCMS) said the MIP would 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” (about 6 million people).

According to The Guardian, the government has also been “forced” to scale this ambition back to reach approximately 60,000 premises (900,000 currently don’t have full mobile coverage). Similarly the £150m can now only be used in areas where there is currently zero mobile coverage. So, if you can already get basic 2G for voice and barely usable data connectivity, don’t expect much of an improvement in the future.

A DCMS Spokesman said:

The focus of the project is on maximising the number of people benefiting from the investment, as far as reasonably possible. It is still our aim to cover the majority of the premises and key roads situated in complete not-spot areas.”

In fairness we can understand Three UK’s decision as Ofcom originally intended to award the 98% obligation to one of the future 800MHz licence holders (ideally Three UK) but, given all the doubt, it would be difficult for an operator to agree until it knows how the auction itself will pan out. The related contract is now expected to surface “in due course” (i.e. delayed).

It should be said that Three UK hasn’t entirely excluded itself and promised to re-examine the decision after Ofcom’s auction has completed next year. This does carry some risk though as Ofcom could choose to award the obligation to somebody else, although most of the other operators already have competitively strong market positions (i.e. more competition concerns). In any case the 98% target has now been somewhat watered down.

As a side note Ofcom itself originally opposed the MIP and feared that mobile operators might pay less if it included the new coverage commitment, which the regulator originally estimated to cost an extra £215 million.

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