Mobile Operators Invest In The UK ‘As A Last Resort’

Mobile operators will only invest in the UK as a “last resort” because the competitive nature of the British telecoms market and the difficulty in building infrastructure, according to Arqiva.

Nicolas Ott, Arqiva’s managing director of M2M and Telecoms, told a Westminster eForum earlier this month that unless the government made it easier to build networks in the UK, operators would continue to look more favourably at opportunities in emerging markets, which can be more lucrative.

Abandoning the UK

“EE has been sold by Orange and Deutsche Telekom, so you can see that selling EE is a way of exiting the UK market, and Orange is investing in other countries,” he told TechWeekEurope. “Telefonica is potentially selling O2 to Hutchison, yet is investing in other countries.

“Vodafone’s Project Spring [is investing in the UK] but also applies to many other countries and BT [owner of EE] is the UK incumbent.

“I think when you see [these trends], the UK is a demanding market.”

He argued that consolidation should be viewed as a “market solution”, and that regulators should look on it favourably. Three and O2’s proposed merger is currently up in the air, but Vodafone and O2 share some infrastructure as part of their ‘Beacon’ joint-venture, as do Three and EE as part of MBNL.

Relaxing red tape

Arqiva’s position is obvious as it has 2.5 operators on every mast it owns and supplies a quarter of all masts to the four major UK operators. Getting all on board would reduce rents, and changes to legislation would make it easier to add new operators without increasing costs.

This of course, was the goal with the £150 million government-funded Mobile Infrastructure Project (MIP), which Ed Vaizey, minister for the digital economy, has himself admitted was “not a success.”

Earlier this year, Prime Minister David Cameron suggested the government would implement legislation that will make it easier for mobile operators to build masts and other infrastructure to boost connectivity in rural areas.

Cameron admitted more needed to be done and suggested that campaigns to stop masts from being built a decade ago over aesthetic reasons and unproven health concerns had actually had a detrimental impact.

“There’s clearly more that needs to be done and I think this is something for members right across the House [of Commons],” he said. “Ten years ago, I think we were all guilty of leading campaigns against masts and all rest of it. Our constituents now want coverage for the Internet and their mobile phones.”

These are proposals that Arqiva is firmly behind.

Rural concerns

“I think there is a real fight in rural areas and small cells,” Ott continued. “In rural areas, we have to contact the local authorities who quite often require a full planning application. That process is quite time consuming and expensive.”

Ott says the planning requirements are not suitable for the “real world” and should only be necessary in a “limited” number of situations. He added that Arqiva once withdrew from a village because it couldn’t decide what colour a mast should be.

“Maybe local authorities have been given too much power. How far can they go to prevent a site from happening? The national trust is blocking sites altogether. I respect is mission, but how do you trade off that from the fact that some houses will never have mobile coverage.”

Landlords are also seen has having “excessive” requirements that can make it expensive to build a new site or upgrade an existing one. Arqiva wants future legislation to resolve disputes rapidly rather than having to engage on lengthy, and costly

5G threat

The threat to rural communities is real, he argued, as is the UK’s position as a leader in 5G, which will require significantly more masts and small cells.

“You need small cells,” he protested. “In Tokyo, the main operator has thousands of small cells. You are starting to see the same in US.

“Small cells in the UK are a very time consuming exercise as planning applications are different in one borough from one to another. In some towns, we have to file an application for each individual lamppost. There is an urgent need for the UK to adopt one common set of principles.”

Ott noted that one borough was unable to process the sheer number of applications it demanded and that such filings are paper intensive.

“We have to move fast or it will be too expensive to roll out small cells,” he added. “[This is] not the best use of council resources.”

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