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Fight Over Costs Threatens Shared UK Rural Mobile Network

Wednesday, February 5th, 2020 (9:25 am) - Score 1,193
ee 4g mast in a rural uk field

The £1bn Shared Rural Network (SRN) agreement between BT (EE), Vodafone, Three UK and O2, which aims to extend geographic 4G mobile (mobile broadband) coverage to 95% of the UK by 2025, could be in doubt after some of the participants expressed concern over high costs. A key meeting is due to discuss the issue today.

The SRN is essentially an industry-led way of improving coverage, which proposes both the reciprocal sharing of existing masts in certain areas and the demand-led building and sharing of new masts in others. However some key details of the SRN are still being decided, such as the question of how much will be charged by each operator for rivals to access existing sites.

NOTE: The Government has pledged to commit £500m to help fund the SRN, which forms part of the £1bn total.

Catering for remote rural areas tends to be very expensive and there are fears that this could thus be the one area where the SNR hits a major stumbling block. In particular BT has a fair bit more infrastructure (masts etc.) deployed across rural areas than their rivals and as such the costs they propose will arguably be the most important ones to watch.

Last month BT issued their first cost proposals and they did so alongside a somewhat defensive sounding blog post (here), which read as if they were bracing rivals for some hefty charges. Today the BBC appears to confirm that at least some of their rivals have grave concerns about the proposed costs.

For example, O2’s boss fears the fees “may undermine the viability of the project” and an industry source suggested that it might end up being cheaper for operators to build their own masts. The report claims that BT are seeking to include 320 yet-to-be-built masts into the agreement and to charge 250% more than the existing commercial rate for rivals to access them.

BT will also offer rivals a cheaper rate for masts on its Emergency Services Network (ESN), which were partially funded by the government (several hundred of these have been built in rural areas). Despite this, all of the major mobile operators have expressed a desire to reach a final deal and get it implemented before the Government’s next Budget 2020 announcement on 11th March next month.

The alternative would delay the SRN or could potentially result in the Government returning to their long-running threat of a legislated Rural Roaming solution, which is likely to hit BT harder than their rivals and could stifle future investment in rural areas. Equally they could go back to forcing through new coverage obligations via Ofcom’s forthcoming auction of the 700Mhz band.

At the same time we shouldn’t forget that it’s normal for negotiations to start with each side proposing something extreme, before later finding a more acceptable middle ground.

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By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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9 Responses
  1. Michael V says:

    Here we go again. They will be sharing infrastructure, on new & existing sites. I get that land owners will get paid but why the hell do the Operators have to charge each other when accessing a site… They are all in it together. BT just want money & don’t care about sharing.
    Rant over!

    1. JmJohnson says:

      They wouldn’t be equally sharing infrastructure.
      If entity A has invested 1 billion and entity B has invested 100 billion in the infrastructure to start then to say that they shouldn’t charge for the ratio difference is absurd.
      Cost of access must be ratio’d with cost of investment.

      It’s the argument I’d expect from a socialist/communist/Labour supporter.
      It’s those arguments that stifle innovation and investment.

    2. TheFacts says:

      Like Asda should stock Waitrose items? They are all in it together.

    3. Michael V says:

      @Jim. Yes I know that one operator could invest more than the other. But they say they rather SRN over roaming but then the Operators want to bash each other with stupid high charges for all four companies to access a single location.[in addition to land owner charges] No that does not make sense & does not benefit anyone.

      Don’t assume one is socialist/communist/Labour supporter just from a point of view. This is a site for conversation. If the Operators can’t play nice then ofcom will force an unwanted decision.

    4. FibreFred says:

      So you think it’s fair for some Telcos to spend all their money on masts, the supporting connectivity and land payments. Whilst other telcos spend a lot less but still get cheap access to rival masts?

      Or to take it even further a new Telco enters the scene and builds nothing at all but uses what others have paid a fortune for.

    5. New_Londoner says:

      I’m pleased to see that BT is proposing to charge relatively high rates for access to its rural mast infrastructure. This allows the other operators to extend their coverage quickly if they wish but still gives an incentive for them to invest more of their own money over time to replace at least some of the BT sites with their own.

      In the meantime, given that it has invested considerably more money, BT is entitled to generate margin on this – it’s rightly about risk / reward.

  2. FibreFred says:

    Build your own masts then.

    Always leeching…. very tiresome.

  3. Guy Cashmore says:

    Meanwhile, some of us suffer from fractured mobile coverage on a daily basis. Half our parish has 3/EE coverage only, the other half O2/Voda only, this situation has been exactly the same for around 20 years. About time OFCOM forced the MNO’s to activate rural roaming with immediate effect and keep it available until the SRN is agreed and working.

    1. Mark says:

      Guy cashmere. Be thankful you have some mobile coverage, the town I live in, the nimbys have stopped all masts being built for years and the council with the conservation clause, even though they get built in other parts of the Cotswolds,several thousand population, see very little in this proposal sorting out this mess.

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