Source · Select Committees · Public Accounts Committee
Recommendation 11
11
Accepted
Ofcom granting cost relief to operators could jeopardise the 95% 4G coverage target.
Conclusion
BDUK said that the mobile network operators will pick up any additional costs they incur in delivering the programme as they are required to deliver the coverage obligations in their licences from Ofcom. However, the licences also allow the operators relief from these obligations if costs have been excessive. BDUK told us that Ofcom would say that it needed to be reasonable in coming to its judgement about operator compliance with their licence obligations. However, we note that, if Ofcom were to grant such relief, this could put the achievement of the Government’s 95% target at risk.20
Government Response Summary
The government states that the 95% coverage target is on track to be met ahead of schedule and within budget, emphasising that the Shared Rural Network's grant agreement structure caps government financial contributions, thereby transferring delivery risk to MNOs.
Government Response
Accepted
HM Government
Accepted
1.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2024 1.2 Deployment progress from the Office of Communication (Ofcom) show UK geographic coverage from at least one mobile network operator (MNO) is making excellent progress since Building Digital UK (BDUK) reported to the committee in April, with indications that the overarching 95% coverage target will be met ahead of schedule and within budget. 1.3 The Shared Rural Network’s (SRN’s) Grant Agreement structure moves the majority of the financial risk for delivery outside government. Using a capped grant fund for the Total Not Spot (TNS) element of the programme ensures the government’s financial contribution cannot exceed £300.7 million over the programme. MNOs must remain within this grant envelope or use their own funds to deliver their 1% coverage target. 1.4 For the Extended Area Service (EAS) project, delivered with the Home Office, BDUK is working closely with its partners to ensure that maximal benefit can be achieved within the allotted programme funding. 1.5 SRN is technology neutral. If technology can meet the Department for Science and Innovation and Technology’s (the department’s or DSIT’s) minimum speed requirements within the terms of the grant agreement, it will be eligible for subsidy. The programme delivers to Ofcom’s standard of ‘good network service’ with speeds of at least two megabits per second (Mbps), though speeds of at least six Mbps are expected in most of the network’s footprint. In all cases, the government’s delivery partners have the freedom to choose the best technologies to deliver their targets with while maintaining value for money.