UK mobile operators have expressed concerns about the costs involved in participating in the Shared Rural Network (SRN), which threatens to tip the UK back into having national roaming mandated if they cannot reach an agreement.
The SRN is aimed at filling the UK’s notspots and ensuring customers have connectivity in 95%+ of the UK irrespective of the network they subscribe to.
When BT announced its proposed charges last month, its consumer division CEO, Marc Allera, began his blog on the topic with a rather ominous statement that while “joint investment in rural coverage is imperative, prior investments must be respected – and future investment protected”.
The BBC is now reporting O2’s CEO Mark Evans as saying the fees sought by BT “may undermine the viability of the project”. Many in the industry are speculating whether it wouldn’t just be cheaper to build their own masts.
The government has already committed £500 million to help fund the SRN (half the estimated costs), but there’s still another £500 million to find from the industry. The Financial Times says that BT/EE wants to include 320 proposed masts in the agreement (ones that are not yet built) and is suggesting it would charge 250% more than the existing commercial rate for using them. BT/EE has offered access to Emergency Services Network (ESN) masts, which were also partially funded by the UK government, at a cheaper rate.
All of this can be viewed as negotiating behaviour to secure the best possible deal. But it’s important to remember that national roaming was previously rejected by BT/EE because it saw this as negating the advantages it gained from having more extensive network coverage than its rivals. If the government were to return to this idea, it would hit BT/EE the hardest – meaning that while they are trying to squeeze the maximum possible value out of network coverage in rural areas, they also have the most incentive to strike a commercial deal before the government or Ofcom gets involved.
But this is not something that can simply be swept under the carpet, or delayed.
The government has committed to completing the deal within its first 100 days, with all industry participants indicating they want the deal done by the next budget (due 11 March 2020). The government is not impressed by all the horse trading, with the Financial Times reporting that James Heath, director for digital infrastructure, has sent an email to all four operators stating they needed to “step up negotiations” and get a deal done by the end of the week. Though unlikely any agreement will come so quickly, it certainly puts a fire under negotiations and signals the government is unlikely to accept unreasonable behaviour or feet dragging from any of the four operators. Having stumped up its cash, it feels entitled to expect the industry to meet it half way.
Mark Evans confirmed O2’s commitment to the project but seemed to hint that the government may have to become involved. Writing in a blog, he said the SRN: “requires the Government to deliver planning policy reform and a modest level of funding; and it requires Ofcom to change its forthcoming spectrum auction rules and amend the licences of the mobile network operators.” Commenting that while it was “encouraging” to see the SRN in the government’s top 10 priorities, he said “all parties now need to build on the collaborative progress that has been made in developing the SRN, so it can be fully adopted and ready for implementation by the time of the Budget on March 11th”.
Both 3UK and Vodafone have made more circumspect statements, confirming their commitment to both the project and the timetable.