UK: Ofcom Publishes Infrastructure Report

Last Updated: 5 January 2012

Article by James Walsh, Senior Associate, Telecoms Team and Charlotte Walker-Osborn Head of TMT Sector.

What? Ofcom has published the remainder of its first report on the UK's communication infrastructure as required under the Digital Economy Act and has also made its mapping data available to the public.

So what? The report covers the coverage, capacity and resilience of the main public networks and services in the UK.  This article focuses on its specific findings regarding mobile voice and data networks.

Summary. It is now possible to view in visual form the best areas for both 2G and 3G mobile signal coverage in the UK with various maps clearly highlighting  the marked differences in 2G and 3G service provision across the UK.  3G coverage still has a long way to go before it will reach levels equivalent to those of 2G adding much needed perspective to the current discussions around the auctioning of 4G/LTE spectrum.

The report also draws out the collaborative ways in which mobile operators are continuing to work together in reducing their network rollout costs through the use of passive and active infrastructure sharing whilst at the same time maximising the traffic over their networks through MVNO arrangements.  Consumers appear to be appreciating these efforts, with 3G usage increasing; however the question still remains as to how well the mobile operator's networks will be able to cope with increasing demands for both data and coverage in the "always connected" culture that is growing in the UK.

Network Coverage Maps

Ofcom has mapped both 2G and 3G networks throughout the UK using two separate approaches. The first quantifies the percentage of the relevant geographical area which is covered by at least one operator (percentage of land mass served), the second the percentage of postal addresses which are within coverage of the  of the networks. 

Ofcom's analysis is based on signal strength that is sufficient to enable the making or receiving of calls outdoors.  Ofcom decided to assess the signal strength outside of buildings to prevent the different structural qualities of the premises affecting the results. The report also notes that signal reception may be affected by the type of handset being used.

The data included in the report and maps use aggregate coverage levels and therefore do not provide an insight into how "patchy" coverage may be.  However, this also means that the analysis is not influenced by the specific location of "not-spots" within the area as these areas can have a strong impact on a user's perception of the network coverage within their area.

2G Coverage

The geographic coverage maps show a clear distinction between rural and urban areas across the UK.  In relation to premise coverage, 67% of local authorities have coverage from all mobile operators outside of 95% of premises.  In comparison only 46% of local authorities achieve 95% geographic coverage for all the operators.

Lower premise coverage can be linked to poor geographic coverage as a large amount of premises without coverage tend to be located in more rural areas.  Due to the dispersed nature of premises in rural areas, network investment per head is often considerably higher, making the provision of service in these areas less commercially viable for mobile operators. 

3G Coverage

The geographic coverage currently provided by 3G services is considerably lower than that of 2G service provision with operators having focused their deployment in the more densely populated/profitable urban areas.  The report highlights that some local authorities have less than 1% of their geographic area covered by all five 3G networks.
 
3G services had until earlier in 2011 been required to use higher frequency bands (2.1GHz) than those of 2G services (1,800MHz and 900MHz).  These higher frequency signals do not enable the same coverage as 2G services, with the same area requiring a greater number of base stations to achieve a similar level of service.  However, by altering the conditions contained within the 2G operators' spectrum licences Ofcom has enabled the provision of 3G services in spectrum bands previously reserved for 2G service provision.  Unfortunately, these changes were not made early enough to enable their impact to be measured by Ofcom in this report. 

Wholesale Services and Network Sharing

It is common in the industry for mobile operators to share physical infrastructure.  Between the four operators around 40% of cell sites are shared with each other.  This can range from passive infrastructure sharing (e.g. physical sites,  masts, antenna, etc.) to more active sharing (e.g. active electronics, backhaul circuits) depending on the nature of the venture. 

An example of sharing active equipment between operators would be Mobile Broadband Network Limited ("MBNL"), a company jointly owned by Three and Everything Everywhere to set up and deliver a combined 3G network for both operators.  The sharing arrangement includes transmitter sites, base station equipment and backhaul for the 3G network.  These network operators will increasingly share the large majority of transmitter sites, although they will continue to individually retain a number of sites for their sole use.  It is important to note that under this arrangement each of the individual operators will continue to operate separate networks using their own spectrum, except where roaming agreements have been put in place.  In contrast Vodafone and O2 have a more passive infrastructure sharing agreement in place, project Cornerstone, whereby they share the use of physical assets at base stations with the active equipment maintained separately by each operator.

Access to mobile infrastructure is not however limited to just the mobile operators.  Arqiva also provides passive infrastructure sharing of sites and owns or manages assets such as pylons, rooftops, street furniture and broadcast towers.  In 2009, MBNL entered into a strategic partnership with Arqiva for the provision of cell sites.   Under the terms of this 10 year agreement, Arqiva is required to provide MBNL with 5,100 sites.

As well as providing services to retail customers mobile operators also enable wholesale access to their networks by mobile virtual network operators (MVNOs).  The coverage provided by MVNOs is exactly the same as that of the underlying mobile operator.  In the UK, mobile network operators provide wholesale access to 35 MVNO.  As a result 16% of voice minutes and 14% of mobile data is provided to end users by MVNOs.

Consumer Behaviour

Whilst the popularity for mobile voice and broadband services is growing the majority of households still have a fixed line service, with 23 million households in 2010 having a fixed line and 19 million of these subscribing to fixed line broadband services (74% of adults).   Mobile services continue to compliment these fixed services with just 15% of adults living in a household without a fixed line despite 93% of all UK adults owning a mobile phone.

The total number of active mobile phone connections, 76.4 million, exceeds the UK's population which stands at 62 million demonstrating that a significant number of users own more than one mobile device/connection.  Each active mobile connection on average makes 166 minutes of voice calls per month with 72% of these calls being made via the 2G networks (where the relevant operator uses both 2G and 3G technology). Although the use of mobile data is increasing with 33 million end users subscribing to 3G services which has undoubtedly been contributed to by the 27% of UK adults now using smartphones.

Future Developments

4G Trials and Auction

O2 began its trial of a mobile broadband network in the London area this month using a Long Term Evolution ("LTE") network. The trial will run for 9 months and participating users will receive dongles for their computers which will allow them to access O2's 2.6GHz spectrum band.  BT Wholesale and Everything Everywhere have also joined the ranks of mobile broadband trialists using a LTE network covering approximately 700 premises in Cornwall.  This trial will use both LTE technology and BT's fixed assets in the area and will test the use of LTE in mobile handsets as a means to deliver broadband to rural areas

The auction of 4G licences has now been postponed until late 2012 with delays in putting together the rules in relation to the auction having surfaced earlier this month.  However, the 800MHz band, which is intended to be auctioned together with the 2.6GHz band, is currently being used for analogue TV and will therefore not be available until the digital switchover is complete at the end of 2012 anyway.

Data Offloading

As devices become more bandwidth and data-hungry and connectivity to Wi-Fi networks is being incorporated into a growing number of devices, the offloading of voice and data services into fixed line networks is becoming increasingly popular. Cisco, the technology company, estimates 30% of data traffic to and from smartphones is channelled via Wi-Fi networks already. As a result, Wi-Fi minutes are becoming an increasingly common element in smartphone contracts. O2 plans to introduce a free Wi-Fi hotspot network by the end of the year.   BT, through its Openzone network, and BSkyB currently own the two largest Wi-Fi hotspot networks in the UK.

The main issue with WiFi technology is that there is not yet an automatic handover from hotspot to hotspot which means that it is less relevant for people using their devices on the move. As the Wi-Fi spectrum is unlicensed, there are also no usage or user restrictions and most Wi-Fi devices in the market have been configured to use the 2.4GHz band which leads to concerns that this band might soon become too congested for efficient use.  A potential solution being mooted to address this problem is the use of "White Spaces" in the TV Spectrum.

Ofcom's Work on Mobile Coverage

Ofcom is currently undertaking drive testing of motorways and other key roads throughout the UK to understand how road coverage compares to general geographic coverage.  The intention is not just to measure actual road coverage but also to identify the extent to which other factors may impact upon a consumer's ability to make and receive calls.

Ofcom is also working with the Department for Culture, Media and Sport on the implementation of a £150m scheme to improve mobile network coverage announced by the Treasury on 3 October 2011 and is paying particular attention to lessons that have been learned from similar schemes (such as the one introduced in France in 2008).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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