Comment It seems the government’s solution to poor mobile phone coverage in the UK is to mandate a system that leads to less mobile phone coverage. They have got this backwards.
As my colleague Andrew Orlowski has noted, it’s a typical Ministry of Fun reaction to a problem of the government’s own making.
If national roaming is implemented, the government removes an element of competition. The number one reason for people churning from one network to another is poor coverage at home. If the cost of providing a cell site is borderline, there is an incentive to build. If another network has coverage and your customers can use that, the incentive goes away. Worse still, if building a site provides an opportunity for rivals to hang onto subscribers, why would you as a mobile provider bear the cost?
Competition drives build-out
There are three rings in the Venn diagram of mobile network development: Coverage, Price and Service.
A new generation of mobile network has to roll out reasonable coverage before it can sell anything. No one looked at 4G before there were enough places where there was a signal. Over time, the coverage between networks becomes much of a muchness and the battleground moves to price, then, as the proposition matures, all networks begin to charge pretty much the same rates. You can see this reflected in how similar the network metric of Average Revenue Per User (ARPU) is for any given country. Finally, networks compete by offering different services – things like Vodafone’s One Net or O2’s box.
What happens at the overlap is interesting. When a network is offering poorer coverage it can compete with another by dropping the price. When a network has an interesting service, it can charge more. But what the network cannot do is roll out services when it does not have the network in place. So for all the special cool things the mobile network wants to charge you extra for, they should not even be thinking of the third ring before they have it in place.
The networks have to re-learn this lesson each time around. When 3G was launched, the hype was around video calling. With 4G, it is mobile broadband and (again) television, although this time with LTE broadcast. But nothing works until the first ring is in place and then the network can build on price and differentiation.
National roaming removes the first ring. Coverage magically becomes Somebody Else’s Problem – a phenomenon which might be jolly useful for hiding spaceships but is pretty rubbish if you want people to actually go out and build more base stations.
The national roaming scheme is a good way to get fewer base stations installed when what we need is more.
All your base are belong to us
The technology for putting in mobile phone coverage has gotten easier and cheaper over time. Building a mobile base station used to require a good chunk of land, a large tower and a fat copper cable to carry the calls.
Today base stations can be very much smaller – often integrated into the antenna – and combined with solar or wind power and microwave backhaul could be completely autonomous. More typically in the UK you have power but not the backhaul. A great example of this is that Ericsson has a 4G base station built in conjunction with Philips to provide street-lighting and mobile coverage. By putting in the Philips LED lights, a local authority can save on its power bills and the local telco can have lots of sites.
If there is fibre to which one may connect the lights, that’s all fine and dandy, but realistically this is unlikely. Ericsson has alternatives. luckily. Naturally there is microwave, but there is also the option to use some LTE and build a mesh of streetlights.
The result is that large areas can be covered at a lower cost. There are limitations with a mesh – you can’t get the ultimate bandwidth, and there is poor latency – but you can provide rural areas with both lighting and 4G coverage at a sensible cost.
The government needs to embrace this kind of technology to solve the poor coverage issues.
The operators rightly point out that they have met and exceeded the population coverage goals specified in their licence agreements.
If coverage isn’t good enough, that’s the fault of whomever drew up the obligations. It’s telling that the proposed new auction has no coverage obligations.
You can understand how a government might think that National Roaming is a good idea. If you think of mobile coverage as a national utility, you might wonder why we need four parallel sets of infrastructure. So let’s take that “national utility” thought and explain in terms that a minister would understand what the government should do:
A four point plan
1. Stop treating spectrum as a cash-cow
Adding a coverage obligation may make spectrum less saleable, the government needs to decide what it wants, money or coverage. And if it’s coverage then it needs to decide if that’s by population or geographical coverage. Don’t stipulate one and measure the other. Promoting competition between networks is a good thing but sucking all the revenue into the Exchequer is like landing on the “you’ve just appointed designer card to renovate your properties” car in Monopoly. You then can’t afford to build.
2. Eliminate planning permission for building small sites
The process for building a new cell site is entangled in ridiculous quantities of red tape. The result is that networks will always prefer to use sites they already have. Unfortunately those sites which were optimal for 900MHz ETACS are not going to be optimal for 2.6GHz LTE. The result is huge compromises in order to get anything rolled out in months rather than years.
3. Kick the MIPS project into action by reducing the bureaucracy.
This £150m project to install sites in areas where there is poor coverage has built two sites in three years. An insider told us that this is because each site requires 19 signatures for it to progress and the whole operation is mired in in-fighting.
4. Get an EU grant to roll out coverage in poor areas.
In 1996 the EU paid £3.8m towards building 250 sites from Shetland to Argyll and the Western Isles to Moray as part of the Highlands and Islands project. There was £200,000 of additional funding from the Scottish development agency and this was enough to get the networks to spend £42m on covering some of the most remote parts of Scotland.
The only thing the idiotic national roaming notion has done is show how little the government understands mobile phone networks and unite them in corporate eye-rolling. Making things easier for the networks and helping them is the way forward. ®