What other countries can learn from the UK’s Shared Rural Network

Jan 4, 2021 | Insights Blog

In a world where the digital economy is the lifeblood of countries’ wealth, the provision of high-speed wireless connectivity has become a critical enabler. The black swan event that is the Coronavirus pandemic has only served to exemplify this, facilitating the continuation of office and classroom productivity from home. 

It is no surprise, therefore, that governments around the globe are turning to investment in telecoms infrastructure as a mechanism to drive social and economic progress, with aspirations to eliminate the digital divide and distribute employment opportunities across wider geographical areas.

But as apt as government intervention may appear, it has, historically, been riddled with challenges. There is no silver bullet. While some have resorted to limited interventions in the form of coverage obligation-based spectrum licenses, others have opened up government-owned infrastructure for co-location and encouraged sharing.

The United Kingdom’s approach to this conundrum is world-leading, and represents a replicable blueprint for other governments to intervene in a manner that safeguards market competition but also delivers positive results for connectivity-dependent citizens and businesses – all at a viable cost for both private industry and government.

Why was Government Intervention required in the United Kingdom?

Like many countries, the UK has long been afflicted with deficiencies in the levels of wireless infrastructure available in sparsely populated areas. For those unfortunate to live or work in such areas, the lack of connectivity represents a prohibitive barrier to participation in the digital economy.

In so-called “not-spots”, for example, mobile operators report a high rate of dropped calls and failed data session attempts. Oftentimes, due to topographical challenges, there is no alternative or competent fixed broadband infrastructure to access, compounding the former and forcing people to rely on satellite options as a last resort or to travel to a local community centre or cafe.

Of course, this is as much an economic problem as it is a technical one. With market revenues in a state of relative stagnation and increased investment requirements to densify and deploy 5G, the expansion of rural mobile coverage is not at the top of any operator’s priority hierarchy.

And it is not difficult to understand why. The number of addressable subscribers for every site in the Scottish Highlands is markedly lower than it is in metropolises such as Manchester and London, and so investment is weighted towards those markets where a large number and significant value of subscribers (such as enterprises) are located.

In recent years, there have been considerable gains in reducing the number and geographical expanse of not-spots in the UK. The wide scale deployment of the 800 MHz band for 4G LTE, in particular, has expanded access to data and voice (through VoLTE) services.

The same can be said for the network sharing agreements between EE (formerly T-Mobile at the time of initial signing) and Three – MBNL – and Vodafone and O2 – CTIL – both of which have achieved synergies.

Today, the majority of sites are shared passively, splitting costs associated with the physical and non-active components of a site, and thereby ensuring operators retain control of the antenna and associated active equipment to provide a differentiated service. Operating expenditures such as rental fees can be cut in half, for example.

However, despite the significant progress, it became clear that it would not be commercially viable for the market to completely resolve the issue of not-spots on its own. Instead, government intervention would be required to support investment and promote a coordinated approach across stakeholders such as local authorities and community groups.

An Overview of the Shared Rural Network (SRN)

In March 2020, the UK’s Department for Digital, Culture, Media & Sport (DCMS) announced the successful signing of a £1 billion programme to expand mobile network availability in rural areas. The Shared Rural Network (SRN), as it was launched, represented a watershed moment in the relationship between government and the telecoms industry.

In order to perform the delicate process of securing an agreement between four mobile operators, the government and telecoms regulator (Ofcom) agreed to a compromise. In exchange for participating in the programme, the deeply unpopular coverage obligations attached to the 700 MHz and 3.6-3.8 GHz spectrum auctions were removed.

On a more granular level, the SRN is composed of two parts: an investment of £532 million by EE, O2, Three and Vodafone to co-locate radio equipment on rural sites, and a £500 million government investment to construct new, shareable sites. Combined, it is envisioned that these investments will see 4G coverage from at least one operator expand to 95% of the UK’s geographical landmass by the end of 2025.

The benefits of this programme will be particularly noticeable in rural parts of Scotland and Wales, where a significant proportion of today’s not-spots exist. The former will see 4G coverage reach 74% from all four operators (compared to 42% today), while the latter see coverage rise to 80% from all operators (compared to 58% today).

Notably, a further 280,000 premises and 16,000km of roads will enjoy 4G coverage thanks to the SRN, and improved indoor coverage (due to increased use of low-band spectrum and improved site density) will benefit 1.2 million homes and businesses. A jointly owned company, Digital Mobile Spectrum Limited, is overseeing the programme.

As defined by Ofcom, these 4G coverage estimates are based on “the minimum signal strength required to deliver a 95% probability of making a 90-second telephone call successfully completed, and a 95% chance of getting a download speed of at least 2Mbit/s”. If license obligations are not met, the regulator wields the power to issue fines of up to 10% of an operator’s gross revenue.

More recently, as a complement to the SRN, the Scottish Government announced a partnership with EE to aid in the delivery of a £25 million 4G Infill Programme (S4GI), which aims to enhance network availability in not-spots across the Highlands and Scottish islands. This announcement followed one of a similar nature with Vodafone earlier in the year.

Forming part of EE’s Emergency Service Network (ESN) contract with the Home Office, 4G access will be provided to Scottish Emergency Services and Mountain Rescue, as well as residents and businesses, for the first time.

Conclusion: Government Policy needs to be Multi-Layered

The evolution of mobile networks into forming a key component of national infrastructure necessitates a step-change in government policy. In order to promote balanced regional economic development and shrink the digital divide, targeted interventions that span everything from the removal of planning barriers to the provision of public funding should be on the cards.

While the United Kingdom continues to be a role model in this space, other countries are also beginning to recognise the challenge and opportunity and are responding accordingly. The Federal Communications Commissions’ “5G Fund for Rural America” is one such example, providing up to $9 billion in federal subsidies over ten years to connect the disconnected and enable applications including remote working and telehealth.

Countries which have placed all their eggs in one basket such as Ireland and focused solely on investing in the enhancement of fixed broadband access risk falling behind in mobile. As the primary mode of connectivity outside the home, the importance of mobile networks for both society and the economy cannot be overlooked.

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