VodafoneThree Calls for Energy Cost and Regulation Relief

It’s no secret that the UK’s mobile network experience leaves a lot to be desired, with a regular drumbeat of newspaper articles, often backed up by data from network analytics companies, showing how badly the country performs in this regard compared with its international peers. 

The obvious question is: why is this the case and what can be done about it?

Enter VodafoneThree, which has recently published its Mobile Market Index, produced by WPI Strategy. This compares the operating environment of mobile network operators across 10 nations in Europe, Asia and the US.

The report points the finger at several factors. These include high energy and spectrum costs, restrictive regulatory policy and an increasingly competitive MVNO market. 

In addition, an ageing engineer workforce combined with the relatively low proportion of UK university goers graduating with engineering degrees, is creating a retirement gap. This makes it harder to find the talent needed to expand and maintain the country’s mobile networks. On the positive side, the report ranks the UK as ahead of the curve on year-on-year growth in engineering graduates.

The study ranks the UK in eighth place out of the 10 countries analysed for the factors that enable a mobile operator to operate and invest, putting it behind nations such as Singapore, South Korea, Germany, Australia and the US, but ahead of France and Spain.

Breaking this down further, it states that UK operators face the second-highest energy costs and planning red tape. In addition, the UK is ranked seven out of 10 for the pipeline of relevant skills.

The same report places the UK in ninth place for overall network quality.

VodafoneThree’s trio of wishes

In light of its findings, VodafoneThree is seeking three policy changes from the UK government: modernisation of the planning system to speed up advanced network rollouts, the removal of the regulations that act as barriers to the use of 5G network slicing and for the mobile sector to receive some of the energy cost mitigations that other sectors enjoy.

On that last point, VodafoneThree highlights mobile operators' role as providers of always-on critical national infrastructure. 

The operator will need patience, given both the summer recess and the time required for the UK’s incoming new prime minister, Andy Burnham –  the seventh in a decade – to fully get his hands on the ‘levers of power’. 

Improving despite the headwinds

VodafoneThree is walking a difficult tightrope. After all, much of the rationale behind the recent merger between Vodafone and Three was that it would improve users’ mobile experience, with the two companies promising to invest £11bn (US$14.8bn) to create one of Europe’s most advanced 5G standalone networks.

Indeed, the merged operator states that in the first year following the merger, it eliminated 16,500 square kilometres of mobile coverage blackspots. In addition, integrating the two networks means that up to 28.6 million customers now automatically switch to the best available coverage.

Keeping momentum

The report’s findings are intended to add to the debate around the industry’s future, sparked by the UK government’s ongoing Mobile Market Review. 

“Since the merger we have raised the bar for connectivity in the UK, eliminating thousands of not spots and providing millions of people with access to our fastest 5G speeds”, says Andrea Donà, Chief Network Officer, VodafoneThree.

“But we cannot afford to lose momentum. Fast, reliable and quality mobile networks are a fundamental driver of economic growth and prosperity.

“Which is why we support the UK Government’s efforts to examine the barriers holding back our mobile networks.

“Bringing the UK’s investment environment up to the standard of our international peers could help to support public services, eliminate digital divides and enable communities to thrive.”

The 10 countries included in the study are: the UK, the US, Germany, France, Spain, South Korea, Australia, Norway, Singapore and Hungary. 

They were selected for their relevance to UK mobile market policy, being a mix of large G7 economies (USA, Germany, France), European mid-sized peers (Spain, Hungary), advanced network leaders (South Korea, Singapore), and ‘structurally informative comparators’ (Australia, Norway).