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Economic output connects with mobile coverage

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Analysis of Ofcom data reveals that poorly connected areas suffer economically. The flagship scheme to improve rural 4G coverage may help, but the way it measures success could mask continuing problems.

UK districts with the largest gaps in 4G mobile coverage create much less value for the local economy, a new E&T analysis reveals. The findings are a result of a data analysis that evaluated local districts’ 4G outdoor mobile coverage as reported by the communications regulator Ofcom. 

E&T compared local districts’ gross value added (GVA), the value generated by any unit engaged in the production of goods and services, with the areas of worst 4G mobile signal coverage with respect to ‘outdoor premises’. This is the most suitable measure, according to Ofcom, as it focuses on areas with people and buildings rather than unpopulated countryside. E&T found GVA in low-coverage areas is considerably lower than that for well covered districts.

Graham Payne, founder of StrattoOpencell, with a background in rolling out mobile networks for Mobile Broadband Network, told E&T that the findings of the analysis ring true: “It is always the case that building each operator’s coverage in rural areas is extremely expensive. And it doesn't really pay back."

In places with the poorest 4G outdoor premises coverage, like Rutland with only 62.8 per cent, Copeland (in west Cumbria) with 65.5 per cent, or West Devon with 66 per cent, GVA rates as published by the Office for National Statistics were found to be at least 40 per cent lower than the national average. 

For the bottom 20 connected areas, GVA per head amounts to £21,150. It is over twice as much - £42,426 per head - for local districts with 100 per cent 4G mobile outdoor coverage. 

Low 4G coverage seems to be especially a problem for local information and communication businesses. GVA generated within the information and communication sector, a business area strongly dependent on good mobile and fixed connected infrastructure, the disparity is even larger. While the per capita GVA for the bottom 20 geographical areas amounts to £453, the overall average was £2,468, or more than five times as large.

Where in England did 4G outdoor mobile coverage improve most between 2017 and 2018?

Country Land and Business Association deputy president, Mark Bridgeman said in an October press conference that the countryside has “huge potential for job creation and new economic growth”, but to uncover it “we must ensure every community in the country is fully-connected”.

E&T’s results emerge less than two months after the government announced plans to battle poor mobile signal in rural areas. The Shared Rural Network, a £1bn initiative, is backed by industry funding of £530m and a further £500m commitment from the Government.

Hamish MacLeod, director of Mobile UK, the trade association for the UK’s mobile network operators, says that this would be good news for consumers and businesses across the whole of the UK. 

But despite it being the right project to pursue in his view, Graham Payne's concerns is how the success of the initiative is measured. The Shared Rural Network will drive outdoor coverage footprint, triggering a cascade of mast-building in “really rural areas”. But masts could end up in places “where you maybe have just one house, and otherwise, only fields or mountains”, he says. Outdoor coverage targets may be good for the statistical objectives set, but could fall short in improving the in-building coverage in rural villages. “So, some villages are currently claimed as covered, but they don’t have sufficient indoor coverage”. 

According to E&T’s calculation, the gap between 4G geographical outdoor coverage and indoor coverage – something that is inherently hard to measure per se, Payne says – is a problem in many areas.  

Where in England is 4G mobile outdoor geographical mobile coverage much stronger than indoor coverage?

Does 4G coverage still matter when 5G is now rolling out? Gareth Elliott, head of policy and communications at Mobile UK, told E&T that 5G will initially be rolled out in urban areas to deliver extra capacity but the industry is still very much concerned with building out the 4G network. In rural areas especially, where coverage is the more pressing concern, the Shared Rural Network aims to extend 4G and eliminate partial not-spots. Mobile UK is currently working with the IET to provide guidance for planners on 4G, among other networks. 

The Shared Rural Network will take the UK’s 4G geographic coverage by all four operators from 66 per cent (or 91 per cent by at least one operator) up to 92 per cent of the UK’s landmass, helping to eliminate partial not-spots. With the Government’s commitment to fund areas where there is no coverage it is expected 4G coverage by at least one operator will extend to 95 per cent of the UK, Elliott told E&T.

The Shared Rural Network also promises to address the lack of competition among operators in rural areas, something that directly affects customers. The absence of competition in areas means “that if you live in an area with coverage from one operator, you will not have a choice of mobile provider. So you may not be able to get the package or deal you were looking for if that provider’s network isn’t available in your area”, Tony Finnegan at Ofcom explains.

E&T’s calculations suggest that the number of local areas that fail to provide much choice on operators is limited. Yet, there are a number of areas where only one operator is serving customers (see chart). 

Payne says he had heard the argument about a lack of competition before, but thinks customers facing unfair tariffs is not such a problem. “The tariffs that operators deploy are not local tariffs, you don’t have a tariff just for your local village, you have a national tariff and competition is pretty competitive on a national tariff.“ He agrees that a lack of competition could affect customer service. 

At the time of writing, the General Election adds uncertainty to the proceedings, but Gareth Elliott from Mobile UK says the industry remains committed to the Shared Rural Network, adding that there is cross-party support for the proposal.

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