Why won’t the UK Mobile Operators Collaborate on rural coverage?

Last week the major mobile networks were again criticised by Grant Shapps chairman of the British Infrastructure Group.

The challenge relates to the anticipated failure of the networks to achieve their 90% geographical coverage target by 2017.

We all understand the absolute frustration of not being able to communicate when we most need to, because of poor coverage or congested networks, and this problem is dramatically increased in rural areas.

If you live in rural areas, and 9.3million of the population do, only 21% of premises have 4G outdoor coverage from all four networks.

However, if you could access any of the four networks by nationally roaming onto what ever network is available, 4G outdoor coverage jumps to 88.9%- very close to that government target of 90%.

And the problem of rural mobile access is only getting bigger as the ONS expect the rural population to increase to over 23% of the total UK population by 2025.

So why won’t the UK mobile operators dramatically increase the customer experience for rural customers by sharing radio access and implementing a national roaming agreement?

The government suggested national roaming as a solution in 2014 but this was dismissed as “unworkable and undesirable” by the networks who instead pledged £5bn of network investment rather than have national roaming imposed upon them.

The truth of the matter is that it is far from unworkable, UK consumers can already benefit from a national roaming solution provided by MVNOs (mobile virtual network operators) such as Gamma Telecom with their recently launched MultiNet offer and Anywhere SIM who offer a similar all network coverage solution.

This is achieved by simply toggling between an IMSI for a UK wholesale host and an IMSI from another non-UK provider and allowing consumers to roam like a foreign visitor.

Surprisingly it’s not as expensive as you might imagine, due to the regulated EU roaming wholesale rates, and I expect if you asked consumers they would even be prepared to pay a small premium to make or receive an important call in an area of poor coverage.

So if the technology is simple and well proven, and the costs are not prohibitive what could possibly be the problem?

My fear is that the major barrier is competition between operators with a healthy dose of corporate pride getting in the way of a better customer experience.

Network coverage is still one of the biggest marketing messages for the mobile operators and whether they are talking about the speed, reliability or coverage of their network a large proportion of the £150m marketing spend by the major networks in 2015 will have been driving network credentials.

National roaming would in some ways level the playing field, but equally it could mean that networks with better rural coverage achieved through better mast placement, longer range better spectrum frequency and ultimately more investment in infrastructure could get an increased amount of traffic from their competitors at a small regulated premium.

Fundamentally the problem is that the networks would rather invest in their own network then pay their competitors to roam on theirs, and the loser is the consumer.

Conversely the winners could be the MVNOs like Gamma and Anywhere SIM who do not have any radio network infrastructure and hence no network brand credentials to protect. Instead as with all MVNO’s they will have built their business on identifying groups of customers not served well by the major networks and seeking to address them. With over 9.6m customers not getting a great rural coverage experience they may have found a significant base of customers to serve.

I suspect that the networks will continue to fight a rear guard action to push back national roaming, although there seems to be a head of steam building behind the case for legislating to make them do it.

Ultimately OFCOM and the government can force this upon the networks and they may decide that this is the right approach, considering the failure to achieve the target on individual infrastructure build out.

Just today OFCOM confirmed that there would be a sale of Spectrum to support the launch of 5G, the next battleground for speed and coverage. Who knows, the networks may decide to capitulate on national roaming to gain some concession in the negotiations on 5G spectrum and licences.

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James Gray

Managing Director at Graystone Strategy

James has over 20 years of experience working in the telecoms and retail industries. He is an expert in subscription-based business models, CRM, direct and indirect channel management and major proposition development and launches. He has held a number of Marketing Director and Consumer Director roles.