The Government and the UK’s four network operators have moved closer to sealing a deal on ‘national roaming’ proposals, following the operators’ latest submission, Mobile understands.
Proposals submitted last week pledge 90% outdoor voice and data coverage by 2017 in return for a cut in annual spectrum licence fees of around £10m per operator, sources say.
The new deal would see operators agree to reach 90% outdoor coverage at -93 signal strength – recognised as the international standard for strong outdoor coverage – which was a prime focus of the Government’s ‘national roaming’ proposals. They also pledge 90% outdoor coverage by 2017, which was not stipulated in the Government’s suggestions.
If the deal goes ahead, it will be seen as a victory for Culture Secretary Sajid Javid, who was responsible for bringing all four operators around the table to hammer out a solution.
It also satisfies operator demands, by avoiding the spectre of network sharing and by cutting millions of pounds from operators’ licence fees, which they could use to fund the improvements.
The voluntary proposal also avoids the possibility of lengthy legal challenges by operators to the original network roaming proposals, as well as the possibility of costly technical and economic barriers.
‘They would be the fastest way to deliver improvements in coverage because they would not face the same legal or technical challenges,’ said one source.
The deal also rests on the Government accepting the operators’ proposal to cut licence fees. One source said: ‘The ask of the operators is that the new 90% coverage obligation be reflected in the value of spectrum. Quite simply, airwaves with greater coverage obligations are worth less, so any forced coverage obligation should be reflected in the current Annual Licence Fee review, with a reduction of £10m per operator, to cover the cost of achieving that 90%.’
The networks argue that the latest proposal would ensure that the rollout of 4G continues unhindered. They point to research by Capital Economics, which estimates that one of the proposals – national roaming – could lead to a reduction in industry capital expenditure of £360m to £440m each year, delay the rollout of 4G by 18 to 24 months, and reduce GDP by 0.1 to 0%, as well as including both voice and data.
They also claim the measures will reduce partial not-spots more than national roaming, since under national roaming devices would need to completely lose coverage before picking up a signal from an alternative provider.
The networks also argue that the proposal would fuel private investment and competition rather than undermine it.
Analysts said the deal would represent a greater victory for the Government. John Strand, MD of Strand Consult, said: ‘It’s a fantastic deal for the Government and very bad for the operators because they have a lot of obligations for some minor cost reductions, plus they are pinning themselves to extra costs and will have to go out and fight for permission to build expensive infrastructure, so it is not a good deal for shareholders.’
A Government spokesman declined to discuss the proposals. He added: ‘There is no set date for a decision.’
The network operators declined to comment.