Mobile firms face big fines for missing new rural coverage targets

Mobile operators in the UK could be fined as much as ten per cent of their annual turnover if they fail to honour new commitments to improve rural coverage.

Last week, the government announced a £1 billion ‘Shared Rural Network’ (SRN) that should see operators extend coverage to 95 per cent of the UK landmass by 2025.

In exchange for the abolition of coverage obligations, the mobile operators would invest £530 million to open and share existing masts in parts of the country where coverage is available from at least one operator but not all.

Shared Rural Network fines

The government would then provide up to £500 million to build new masts in ‘total not spots’ where there is no 4G coverage from any operator. At present, only 67 per cent of the UK’s geographic area is completely covered while seven per cent of the country can’t receive a 4G signal at all.

Ofcom has since confirmed that coverage obligations will not be included as part of the next auction of 5G spectrum next Spring, while the government has only previously stated there will be legally binding commitments.

In a speech to the House of Commons, Culture Secretary Nicky Morgan confirmed the scale of potential penalties: ““The mobile network operators will adopt new coverage obligations within their existing spectrum licence conditions to ensure that the outcomes will be delivered. If they cannot demonstrate that all reasonable efforts have been made to comply with the obligations, there are penalties for the operators, with a maximum fine of up to 10 per cent of annual turnover.”

Morgan also confirmed that both the government and Ofcom will measure progress and could reintroduce licence obligations in the future.

“Annual coverage improvement targets will be published, and Ofcom will report regularly on the shared rural network’s progress in its ‘Connected Nations’ publication,” she said. 

“I have also made it clear to the mobile network operators and to Ofcom that the Government retain the right to support the original Ofcom auction if a final and legally binding agreement on the shared rural network is not reached.”

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