Much has been made of a recent wobble in the progress of the UK’s shared rural network (SRN) initiative, with the Financial Times reporting that BT wants the rural network-sharing deal currently being negotiated with its rivals to reflect the larger investment made by its EE business unit. Telefonica’s UK CTO Derek MacManus says that ‘These latest developments seriously undermine the viability of the project.’
Real Wireless remains strongly supportive of the proposed plan, which imagines a world in which the UK’s big four operators and the UK Government invest £1 billion to establish a shared network that brings robust 4G mobile coverage to 95% of the UK by 2025. Outside the commercial concerns of individual MNOs, the initiative appears to have no downside, delivering LTE to over 3,700 sq miles of the UK for the first time thereby potentially eliminating many of the existing partial not spots and total not spots. Improved road coverage is also another potential benefit.
The advantages of network sharing – both active and passive – seem glaringly obvious in a world in which operators in all markets are facing a daunting combination of challenges. These include price competition, the rising cost of rolling out new networks and offering broader coverage to rural communities, and rapidly increasing usage of mobile data. This combination puts huge pressure on network capacity and drives up the costs of network expansion.
Globally, as the sharing models underpinning the rise and rise of independent towercos suggests, all these factors are driving increased levels of asset sharing so that MNOs can reduce costs. Certainly, increasing numbers of operators are sharing passive, and sometimes active, infrastructure in order to be competitively viable. However, this is not to say that it’s an approach that comes naturally. When each operator genuinely believes in the superiority of their network assets, it’s understandable for operators to feel reluctant to cede any advantage, especially when competition is so tough.
Change – especially in the mobile industry – almost always requires some kind of brutal catalyst. The 2008 financial crash and its aftermath was an important driver for many MNOs to divest physical assets to improve balance sheets and reduce opex. It might well be that the pressure to deliver expensive 5G networks proves to be another factor that pushes the culture of sharing further into the mainstream.
It seems inevitable that in some shape or form the UK’s SRN will become a reality. The threat of mandated roaming – which really does rock the MNO business model in a very fundamental way – is viewed by all players as a truly unpalatable alternative – as are the proposed coverage obligations in the forthcoming spectrum auctions that DCMS is offering to remove as a quid pro quo for getting an SRN agreement completed.
Real Wireless has worked with stakeholders in the UK, Ireland and Austria to better understand the socio-economic imperatives associated with rural service provision and developed models that provide insight to regulators, operators, end users and governments. For example, we are currently considering the implications of synergies between solutions that deliver connectivity for road and rail routes and the role that these transport corridors might play in supporting rural connectivity.
As an independent voice in SRN, our unique modelling capabilities can provide an optimum solution, balancing government funding and the use of existing assets to optimise the coverage provided.
Rural reach has been on the back burner for way too long. It’s time to get creative and deliver sustainable solutions before legislation becomes draconian.