UK Government’s proposal that aims to force mobile operators to offer their signal to even rival network customers in areas with poor coverage would do more harm to the economy than good, a new report has claimed.
According to the Capital Economics latest report, commissioned by EE, the UK government’s national roaming proposal could result in a reduction in industry capital expenditure of GBP 360-440 million a year, delay the LTE rollout by 18-24 months and reduce GDP by 0.1-0.2 per cent.
The report claims that implementation of the proposal would only increase mobile coverage by 2-4 per cent of the UK geography.
Earlier this month, the UK government had announced it was planning to introduce a new legislation in the parliament under which the four major mobile operators in the UK – EE, O2, Vodafone, and Three – will be forced to share mobile phone infrastructure – masts in particular – in rural and remote areas where coverage is poor enabling customers’ phones to find the strongest signal.
“Furthermore, and contrary to the government’s intentions, thinly covered rural areas could see significant reductions in investment,” adds the report.
The mobile operators, however, slammed the government’s proposal saying that it would significantly impact on network reliability and resilience, and would be complex and slow to implement. They claimed that implementation of the plan would remove the incentive to invest in network infrastructure.
“Mobile networks are currently ‘excludable’, meaning that an operator can stop non-subscribers accessing its services. They can compete on coverage, which gives them an incentive to provide infrastructure in areas where it would not be cost effective to do so on its own merits. But by ending this excludability and allowing ‘free riding’, national roaming would remove any incentive to provide coverage in unprofitable areas,” the report noted.
In a statement, EE described the Government‘s national roaming proposal as “a flawed concept” and said that UK’s major network operators have jointly come up with a proposal “that helps solve the problem of rural coverage, without any of the technical, economic and competitive barriers of National Roaming.”
Meanwhile, the GSMA, which represents the mobile industry, has also endorsed EE’s report.
“The GSMA believes there are alternative solutions for tackling the issue of partial not-spots in the UK outside of mandated national roaming, which is technically complex, expensive and would impede law enforcement activities,” said Tom Phillips, chief regulatory officer at the GSMA.
“Most importantly, as such a scheme is likely to result in issues making, receiving and maintaining calls, we need to look at other ways of ensuring that the consumer experience is continually enhanced.”
