Ofcom: Public subsidies and national roaming network could boost rural 4G

Ofcom has made a series of recommendations to the government to improve mobile coverage in rural areas, reviving the possibility of the creation of a national roaming network that would likely be met with hostility by operators.

The regulator gave the technical advice to the government in June, stating that although commercial investments and public policies had seen significant improvements in coverage, seven per cent of the UK’s landmass is still uncovered by any operator, while 30 per cent cannot receive a voice and data service from all four – restricting consumer choice.

EE, the UK’s largest 4G operator, plans to cover 95 per cent of the UK land mass by 2020.

Ofcom said that given the importance of mobile coverage to UK citizens and businesses, improving connectivity was a policy priority.

UK mobile coverage

“We expect that competition will drive some further improvements in coverage. However, because the costs of providing coverage in outlying areas tend to be high, and the revenue generating opportunities low, we do not expect that market forces alone will deliver the levels of coverage consumers expect. Further intervention will therefore be required,” it said in its technical advice.

The most established method of intervention is the attachment of coverage obligations to spectrum licences. Ofcom did this with an 800MHz licence awarded to O2 at the 2013 4G auction and plans to do the same with 700MHz licences earmarked for the rollout of 5G networks.

However, it says the value of the 700MHz band means it will not be able to pursue further coverage obligations and believes other measures will be needed.

The could include subsidies to target rural not-spots and measures that encourage operators to expand infrastructure sharing models. Central and local governments could also introduce policies that make it easier and cheaper to rollout infrastructure – something that would be music to the ears of the industry.

National roaming network

Ofcom suggests mobile operators could be given the same rights as other utilities and be given the same business rates relief recently given to fibre network builders.

The most controversial suggestion is national roaming, which was opposed by all four operators when a similar idea was proposed in 2014. The idea is that if a user cannot receive an adequate signal on their ‘home’ network, they will instead switch to another operator’s network.

However, the operators argued would reduce the incentive to invest in network infrastructure and delay the rollout of 4G by up to two years. Eventually, they came to a legally-binding agreement with the government to improve voice coverage instead.

Ofcom acknowledged that new proposals would likely meet similar resistance but believes that it could improve coverage by between two and three percentage points for operators who win 700MHz spectrum with coverage obligations attached and by between five and ten per cent for those without.

It is now up to the government to decide which, if any, proposals it wants to consider further.