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Mobile UK warns that the government’s ambitions for widespread adoption of 5G could be at risk

Mobile UK

5 min read Partner content

New report highlights a £25 billion investment gap and says that if it is not plugged the UK will struggle to reap the benefits of 5G

The government’s ambitions for the widespread adoption of 5G could be missed if actions outlined in the Wireless Infrastructure Strategy are not followed through.

That’s the verdict of a new report commissioned by Mobile UK, the trade association for the UK’s four mobile network operators (MNOs) – EE, O2, Three and Vodafone. It warns that despite ongoing investment by the mobile telecoms industry in infrastructure of around £2 billion a year, urgent change in the investment environment is required for targets to be met.

As part of the Wireless Infrastructure Strategy, published exactly a year ago on April 11th 2023, the government set out its aim to blanket the country with the fastest, most reliable wireless coverage available – with an ambition for all populated areas to be covered by standalone 5G by 2030.

However, Mobile UK’s latest report, Rebalancing Act: Unlocking the Potential of the UK’s Mobile Industry, highlights a £25 billion investment gap, a sum which it says is integral to the roll-out of advanced 5G standalone networks. If this investment gap is not plugged the UK will struggle to reap the benefits of the widespread adoption of 5G, which could generate £159 billion in productivity by 2035.

The report's findings also show that crucial infrastructure upgrades are too reliant on an under-resourced planning system. This, as well as a growing social demand on the industry to help vulnerable people and provide social tariffs, is creating an imbalance “that further impairs the investability of the sector”.

“It’s clear the industry is delivering strong value through the generation of £5 return to the wider economy for every £1 invested by the operators, and so enabling a positive investment environment for the sector must be the clear priority of government,” says Hamish MacLeod, CEO of Mobile UK.

“As a country we are not making enough progress to meet the objectives of the Wireless Infrastructure Strategy, which acknowledges the power of mobile technology and the ambition to be a leader in 5G.

“Reductions in spectrum licence fees, reforming traffic management regulations and business rate holidays for new mobile infrastructure would incentivise investment. In addition, adequately funding the planning system and appointing digital champions in local authorities would help streamline network rollout and get the UK back on track to achieve its targets.”

The report sets out the industry’s critical role in the UK’s economic prosperity and highlights the need to ensure that MNOs are competitive in attracting capital while fulfilling their social responsibilities.

It is concerned that private capital currently funds the mobile sector almost entirely and that stagnant revenues, cost pressures and the need for continuous infrastructure upgrades are hindering investment potential. It also says that regulatory burdens and economic pressures are impacting MNOs’ profitability, further constraining investment.

The mobile telecoms industry is growing incredibly fast. The demand for data is increasing by 40 per cent every year and 30 billion devices will be connected to digital networks globally by 2030. The latest figures show that there were 81.6 million mobile cellular subscriptions in the UK in 2022, up from 79.8 million the previous year. Mobile communications also support a supply chain that accounts for 75,000 jobs.

Against this backdrop, Mobile UK has called on policymakers to shape the investment landscape for mobile technology by implementing appropriate regulatory and fiscal measures. These include:

  • Following through on policies and actions outlined in the Wireless Infrastructure Strategy, which aims for nationwide standalone 5G coverage by 2030
  • Exploring further policy actions designed to remove barriers to network rollout
  • Implementing fiscal measures that have a direct and immediate impact on improving MNO investment outlook
  • Considering further actions to support private capital being deployed in the UK by mobile operators

Measures like these would help to create “a positive investment environment” that encourages capital inflow, unlocks growth opportunities and drives economic competitiveness.

“In the mobile market, while the government has set ambitious goals to lead in 5G, the UK lags in its rollout compared to its global counterparts,” says the report. “The challenge is now such that much more action is required. Sustaining investment in mobile technology is core to the UK’s prosperity and competitiveness in the global economy.

“By prioritising measures that balance regulatory requirements with operators’ profitability, following through on policies outlined in the Wireless Infrastructure Strategy and exploring additional policy actions and fiscal measures, the government can create an environment conducive to sustained investment and innovation in mobile technology.”

Caroline Dinenage MP, Acting Chair of the Internet, Communications and Technology APPG, told PoliticsHome that the Mobile UK report is “welcome and timely”.

“Investment in digital infrastructure is vital for UK growth ambitions, the evolution of our public services and the way we socialise, shop, and work in the modern world,” she said.

“Mobile networks and MNOs themselves are vital to this – connectivity through mobile telecoms is playing an ever-increasing role in the way we live and releasing the full power of mobile technology has huge potential to improve the lives and prosperity of citizens across the UK.”

Selaine Saxby MP, Chair of the Broadband and Digital Communications APPG, called for investment to be prioritised, especially in rural and coastal areas.

“Investment into the mobile sector needs to be prioritised as in some of the hardest to reach rural areas fixed broadband is near impossible to install or results in physical infrastructure intrusions on to some of our most loved and protected landscapes,” she said. “Collaboration between industry and government is essential to ensure that we fully support the mobile industry.”  

The Mobile UK report says that by committing to a collaborative approach, “industry and government can work together to “ensure that mobile technology continues to enrich the lives of citizens and drive economic progress in the UK”.

“Any shortfall in investment will impair the UK’s growth potential,” it adds. “Furthermore, it will hinder the government’s ability to meet its goals of providing opportunities for all, reducing our carbon footprint, improving public services and reviving economic growth. Striking the right balance between these needs is crucial for long-term success.”

Read the new Rebalancing Act: Unlocking the Potential of the UK’s Mobile Industry report here.

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