01 July 2019

Ending exclusivity agreements

Ending exclusivity agreements image

With 5G coming up fast on the horizon, the pressure is on the UK telecommunications market to roll out the technology as rapidly as possible, while consumers are spending less on connectivity and consuming exponentially more data. Operators need to continue to deploy capacity in urban areas, but making the case for new infrastructure investment can prove tough.

So how can the industry as a whole work together to find better ways of sharing physical network assets so that those operators struggling to build a commercial case for installing new infrastructure across UK towns and cities can do so without breaking the bank?

Part of the answer can be solved through the deployment of ‘small cells’ – otherwise known as mini mobile masts – to broadcast 4G and 5G signals and bring denser mobile coverage to urban centres. These are erected on street furniture, typically the best locations are existing council owned infrastructure such as lamp posts or CCTV columns.

However, we believe that the current concessions model operating across many UK cities which governs access to council owned street furniture is no longer fit for purpose. An alternative model is now needed which creates the right environment to stimulate competition, long-term investment and innovation in future mobile networks.

Under today’s concessions model, many local authorities grant a single mobile operator or infrastructure provider exclusive access to council-owned street furniture for them to locate their mobile network equipment. These small cells are essential for bringing enhanced mobile coverage and capacity to residents and businesses in urban centres. Over time, small cells are expected to play a vital role in accelerating the widespread deployment of 5G services, bringing with it faster speeds and greater reliability for consumers, businesses and public sector organisations.

Yet while the concessions model made sense in the early 2010’s when it first came into common use, the market and regulatory landscape has changed. What is now clear is that exclusivity agreements such as these will only serve as a barrier to further 4G and 5G investments by driving up costs for other mobile operators or at worst effectively locking them out of certain towns and cities.

Under the current model, other mobile operators who wish to access the same physical infrastructure to locate their small cells equipment need to pay a charge to the provider that has an exclusive agreement in place with the local authority. This can prove prohibitively expensive for operators and can hinder investment at a time when we need to be creating the right conditions to stimulate further network investment and boost mobile coverage.

Government initiatives such as the DCMS Barrier Busting taskforce are showing the way in how we can overcome certain hurdles, but the telecommunications industry needs to act and agree a way of replacing the broken concessions model.

BT has already begun leading on this by handing back its exclusivity agreements in nine key areas. But what the UK really needs is an alternative approach which sees industry and local authorities working together to share street furniture locations in an open and collaborative way, rather than the current ‘pay to play’ method.

To do this, BT is proposing to end its exclusive agreements to encourage other local authorities and the wider industry to adopt an alternative ‘open access’ model. Such an approach would allow all mobile operators to access street furniture on an open, equivalent basis, by paying a low-cost flat fee to the local authority. This will create the right environment for long-term investment and innovation in future mobile networks.

Open Access will be critical in ensuring the UK has the best mobile infrastructure in place to maintain its position as one of the world’s leading digital economies.

Paul Ceely is director of network strategy at BT

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