Real Wireless worked with SQW on a thought provoking project for the Scottish Government on 4G coverage, how this affects the economy and the policy implications. While the specifics are about Scotland, the lessons are generally applicable to other countries or regions – particularly those concerned about rural coverage.
We consulted with operators and other industry players to understand their plans. Based on their spectrum holdings we determined what their networks would need to be like to provide the stated target service and what it would cost. We then assessed what impact there would be if there were changes in government policy to make network rollout easier – particularly in remote regions, such as allow public buildings to be used, simplify planning rules, reduce business rate burden and determine what the increased rollout would be if operators deployed with the same level of spending as before.
Based on the improved network performance, SQW were able to determine the economic benefits of the different policy options.
The conclusions were that 4G will substantially improve coverage of both data and voice mobile connectivity across Scotland by all operators; that it will happen surprisingly fast – but that there are policy options to improve both deployment speed and coverage.
As part of the 4G licence award, Telefónica O2 has an obligation to provide “a mobile broadband service for indoor reception to at least 98% of the UK population and at least 95% of the population of each of the UK nations… by the end of 2017 at the latest.”
But we are optimistic that this will actually happen faster, with most operators having 95% indoor population data coverage by the end of 2015. After that, gradual enhancements are expected, reaching a plateau of 98% 4G indoor coverage by 2023 (cf current 2G indoor coverage of about 85%)
The average indoor mobile data speed available across Scotland will increase from about 2.5Mbps in 2012 to approximately 36Mbps by 2023 (23% CAGR).
There is a surprising twist: by 2017, users in the most densely populated areas such as Glasgow and Edinburgh may not, on average, be experiencing speeds any higher than those for people in the least densely populated areas such as Eilean Siar and Shetland, as the more comprehensive coverage in the cities is offset by the much greater contention issues. But areas in between these two extremes – such as Midlothian, East Renfrewshire and Clackmannanshire – may well benefit from having a combination of the cities, resulting in relatively lightly loaded cells and high average speeds.
While much of the world is looking to use small cells and carrier WiFi to help improve the performance of wireless networks, Scottish planning constraints on mobile networks are significantly more restrictive than those in the rest of the UK, entailing greater uncertainty, delays, cost and hassle for operators, and there is a risk that Scotland could be put at a competitive disadvantage because of this.
Overall, the Gross Value Added (GVA) impacts for Scotland of improved business productivity from better mobile coverage £308 million p.a. by 2023 –about 0.025% to Scotland’s GDP growth rate. There is also £116 million p.a. by 2023 of public sector productivity improvement. Increasing the availability of high quality networks brings a clear economic benefit.
While there are some important areas on which the Scottish Government can have little direct influence (e.g. the cost of equipment, and the cost of electricity supply in remote areas), there are some simple policy & planning changes could make a big difference: pulling forward the 97%, coverage level by about four years– though they accelerate deployment they don’t increase on the final 98% coverage expected. This acceleration would add a further £18 million GVA and £7M of public sector productivity benefits.
Scottish planning rules are more restrictive than those in England and Wales, but are currently being reviewed. Changes that will help include: reduce planning constraints; simplify non-domestic rates on mobile cell sites, especially small cells in under-served areas; explore sharing backhaul & better information about how MNOs can use public buildings. Can Scotland’s authorities reduce control and barriers to deployment in anticipation of improved economic benefits that are predicted to result? How can this relaxation be targeted on areas that will benefit society most and not simply subsidise mobile operators?
There are also opportunities to improve rural coverage, by emphasizing the importance of coverage in the competitions for public sector mobile connectivity contracts.
Commercial 4G roll-outs will reach 95% of the population surprisingly quickly, and there are ways to accelerate reaching 98%. However, getting beyond that will be more of a challenge and may need other approaches.