There have been two interesting developments in the UK mobile industry this month – one definitely good news for the industry and its consumers, and one distinctly bad.
Firstly, the good news! We have devoted quite a bit of attention in this blog to the poor state of 3G coverage in the UK. While having a relatively large number of mobile network operators has helped to lower mobile pricing, it has totally failed to encourage the deployment of widespread 3G coverage, particularly in areas outside major towns and cities. Having a large number of mobile network operators has resulted in all operators competing for customers in the same areas with high population density, and avoiding rural areas. It has also resulted in an unnecessarily large number of ‘duplicate’ base stations in urban areas where many residents do not want to see ugly base station masts.
At the Conservative Party Conference this month, the Chancellor, George Osborne, announced a UK government investment of £150 million to improve mobile coverage across the UK. Perhaps unsurprisingly, he did not acknowledge that this funding was necessary due to the failure of previous Government policy or Ofcom in ensuring that mobile network operators were required to deliver extensive coverage as part of W-CDMA spectrum licence conditions (or, at the very least, that they were actually financially motivated to provide such coverage). Putting aside the reasons for the current poor state of mobile coverage, at least action is now being taken to address one of the biggest issues among mobile broadband customers.
Working with Ofcom, the UK Government aims to extend mobile coverage to 99% of the UK population. In consultation with local communities, new mobile base station masts will be installed, to improve coverage for 6 million people. We look forward to hearing more of the details in due course as they become available.
Now the bad news. As we have previously reported, the licencing of 800MHz and 2.6GHz spectrum for next-generation services (i.e. LTE) has been dogged by constant delays.
In March 2011, I reported that Ofcom intended to hold the auction for 800MHz and 2.6GHz spectrum in the first half of 2012, which would mean that the UK would be well behind other countries in the launch of LTE services, including Germany, the USA and Japan. Frustratingly, Ofcom has further delayed the auction, stating that “perhaps” the auction would now commence in the fourth quarter of 2012. Ofcom has attributed this latest delay to a number of “substantial and strongly argued responses” to its recent consultation. After so many delays, one begins to wonder whether the spectrum auction will even take place by 2013.
So, the outlook for the UK mobile industry is that it will be a laggard with next-generation mobile networks, albeit with the coverage of 3G networks improved with a relatively modest £150 million investment. We will continue to analyse the global leaders in LTE. It’s just a shame that the UK will be not among them for quite some time.