Scottish Affairs Committee
Wednesday 14th October 2026
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09:30
Patricia Ferguson
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Patricia Ferguson
Good morning and welcome to this meeting of the Scottish Affairs Committee, where we are looking at connectivity in Scotland. And this morning we are discussing that issue with mobile network operators and infrastructure providers, or at least the representatives of those entities. So if I could start with you, Mr. Freeman, would you mind just introducing yourselves, please?
09:30
09:31
09:31
09:31
09:31
09:31
Patricia Ferguson
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Patricia Ferguson
My first question is really to all of you. So maybe if we just start with Mr. Freeman and go along the table, it will make sense. Don't feel free if someone's already answered the question. Don't feel obliged to say it again. And passing is not a problem for us. So can I ask you why mobile connectivity in Scotland, and particularly in rural Scotland, lags behind the rest of the UK?
09:31
Speaker 1
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Speaker 1
I think the challenge that we see in Scotland is obviously one of economics fundamentally, but how it's expressed is via geography. So Scotland contains some of the most rural and remote parts of the UK. And from an economic point of view, when you're deploying infrastructure that leads to additional costs, things like getting power to site, getting fibre connectivity there, kind of getting the access and so forth. So it's not a technical challenge.
It's more one of kind of economics, which then has an impact on how viable it is to deploy sites in these areas.
It's more one of kind of economics, which then has an impact on how viable it is to deploy sites in these areas.
09:32
Speaker 2
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Speaker 2
Thank you. I think there is a lot to do more in Scotland in terms of improving mobile connectivity, but I think it's important also to recognise the progress that has been made and the foundation that gives us for further progress. If I think back to the time when the Shared Rural Network programme was signed in to 2020, I think you could get a 4G signal from all operators in 41% of Scotland's landmass.
You can now get 4G signal across Scotland's landmass in 71% more to do, but clearly progress. I think in 2020 as well. You could get a 4G signal from at least one operator in 80% of Scotland's landmass. You can now get that in 91. So I think in terms of premises where people live and work, coverage is actually on a par and in some cases better than the other home nations.
The real challenge are those remoter areas of Scotland. Undoubtedly. And you have something like 9% of of landmass in Scotland where you still cannot get a 4G signal from any operator. And there are, as Jonathan alluded to, as well as economics, there are some geographical challenges, right? These are very remote sites that we're looking to build that might require a helicopter build or use of ferries to get kit in. There might be many, many miles from roads.
There's a challenge of getting backhaul to those sites so we can connect them back to the core network. There's also a challenge. We've seen this with some shared rural network. Total hotspot sites are getting power to the sites as well. And above all, we also need for those areas. And this has proved a challenge in the SRN TNS programme. We may get on to that in more detail .
In getting community and landowner and planning authority consent as to that too is a challenge. So there's been real progress. But the big nut to crack, I think, is pushing coverage into those areas where there currently is, is little or no coverage.
You can now get 4G signal across Scotland's landmass in 71% more to do, but clearly progress. I think in 2020 as well. You could get a 4G signal from at least one operator in 80% of Scotland's landmass. You can now get that in 91. So I think in terms of premises where people live and work, coverage is actually on a par and in some cases better than the other home nations.
The real challenge are those remoter areas of Scotland. Undoubtedly. And you have something like 9% of of landmass in Scotland where you still cannot get a 4G signal from any operator. And there are, as Jonathan alluded to, as well as economics, there are some geographical challenges, right? These are very remote sites that we're looking to build that might require a helicopter build or use of ferries to get kit in. There might be many, many miles from roads.
There's a challenge of getting backhaul to those sites so we can connect them back to the core network. There's also a challenge. We've seen this with some shared rural network. Total hotspot sites are getting power to the sites as well. And above all, we also need for those areas. And this has proved a challenge in the SRN TNS programme. We may get on to that in more detail .
In getting community and landowner and planning authority consent as to that too is a challenge. So there's been real progress. But the big nut to crack, I think, is pushing coverage into those areas where there currently is, is little or no coverage.
09:34
Speaker 3
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Speaker 3
Oh, I would just echo everything that said tricky economics and that masts, they have to cover more landmass with fewer people in. And it is very rugged terrain. So that has meant that Scotland certainly on geographic coverage, has lagged as part of our merger. We do have to invest 11 billion into coverage across the UK. Scotland's going to benefit hugely from that. So he said at the moment, 90% 4G coverage across Scotland, 5G coverage from our network will cover the same landmass by 2034 and 99% of the population.
So we are doing all we can to try and fill that delta. We think it's very important to do so. We've got to make sure that we get Scotland's figures up and more representative to the rest of the UK.
So we are doing all we can to try and fill that delta. We think it's very important to do so. We've got to make sure that we get Scotland's figures up and more representative to the rest of the UK.
09:35
09:35
Speaker 4
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Speaker 4
I think that's a really important measure. Yeah, yeah. And so so EE is currently got up to and we look this has actually been quite a successful story in the past 510 years across industry and with government we have made big progress. So EE has now got up to 98% population coverage for 4G, 88% for 5G. And yeah, there's a bigger than the sort of geographic coverage for 4G. We're over 80% now in geographic coverage.
5G is is behind a little bit because it's sort of following on from.
5G is is behind a little bit because it's sort of following on from.
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09:35
Speaker 4
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Speaker 4
Yeah. So we're slightly ahead of operators, but everyone is investing to catch up. And we've, we've put in something like 170 odd new sites in the past decade. We've added 50 new sites under the Scottish Government's 4G infill programme. So there has been some success, I think, through the UK and Scottish Government's initiatives and working with the industry to fill in some of the basic coverage gaps. There's still more to do.
We're still building more sites. We've got some on the go at the minute in Skye and the Trossachs in Islay, and other operators will be doing the same. I guess there's a second point, which is beyond sort of coverage, because I think we can and will hopefully kind of fix most of the issues there, even though the geography and the economics are challenging. But there are some other issues as well, which, which are which go right across the UK, not not specific to Scotland about what we do with the sort of infrastructure we've got and how far we can improve capacity and the service that people get, which does require additional investment.
And that's where I'm sure we'll come on and talk about this. Some of the economics of the industry are a bit challenging. There's more of a government can do on things like planning and spectrum and access to land, and all the kind of basic sort of underpinnings of this infrastructure. And there's also been a big question about, I think, resilience and response to emergency sort of situations, which and I know the committee has been looking at this as well and with relation to subsea cables, but it's also relevant to mobile coverage now.
I mean, the stakes are a lot higher when there is a loss of service than they were ten years ago. So much more nous running across these networks is absolutely critical to everyone's everyday lives. And that's where I think we would probably all all say there's a there's an issue about how, how is government and industry going to sort of share the costs and the complicated investments needed and the kind of protective measures required to think more sort of energetically about that kind of set of resilience issues in the future, because they are going to become more and more pressing.
We're still building more sites. We've got some on the go at the minute in Skye and the Trossachs in Islay, and other operators will be doing the same. I guess there's a second point, which is beyond sort of coverage, because I think we can and will hopefully kind of fix most of the issues there, even though the geography and the economics are challenging. But there are some other issues as well, which, which are which go right across the UK, not not specific to Scotland about what we do with the sort of infrastructure we've got and how far we can improve capacity and the service that people get, which does require additional investment.
And that's where I'm sure we'll come on and talk about this. Some of the economics of the industry are a bit challenging. There's more of a government can do on things like planning and spectrum and access to land, and all the kind of basic sort of underpinnings of this infrastructure. And there's also been a big question about, I think, resilience and response to emergency sort of situations, which and I know the committee has been looking at this as well and with relation to subsea cables, but it's also relevant to mobile coverage now.
I mean, the stakes are a lot higher when there is a loss of service than they were ten years ago. So much more nous running across these networks is absolutely critical to everyone's everyday lives. And that's where I think we would probably all all say there's a there's an issue about how, how is government and industry going to sort of share the costs and the complicated investments needed and the kind of protective measures required to think more sort of energetically about that kind of set of resilience issues in the future, because they are going to become more and more pressing.
09:37
09:38
09:38
09:38
09:38
Dave Doogan
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Dave Doogan
Network entirely would be classed as okay. Because listening to what you're saying about you've got challenges and maybe it wasn't you, but we've heard that the challenges are spectrum planning , access to land on that third point, access to land, other CNI such as pylons. If a farmer in my constituency or A or anyone else in my constituency didn't want the pylon to go on their land, it would be compulsory purchased. Why aren't we compulsory purchasing for masts?
09:38
Speaker 1
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Speaker 1
Recently across the UK there's been a change in the way that. Masts are deployed effectively via the Electronic Communications code. This has led to a really high rate of consensual renewals of leases. So in Scotland we've renewed like 266 leases, which has enabled us to upgrade 750 kind of services for the mobile operators when we look to deploy new sites, as has been done as part of the SRN and other programmes, we have rights within the code to compel landowners to make their land available in the public interest.
To date, we haven't had to use those extensively. The S4G programme, for example, which we were involved in post-deployment. All of those sites were code agreements that were agreed consensually with landowners. So I think compulsory purchases is something that is used in other other kind of critical sectors. It could be looked at, but actually the code is working really well from our perspective. And we are able to largely secure land rights on agreeable terms with landowners.
To date, we haven't had to use those extensively. The S4G programme, for example, which we were involved in post-deployment. All of those sites were code agreements that were agreed consensually with landowners. So I think compulsory purchases is something that is used in other other kind of critical sectors. It could be looked at, but actually the code is working really well from our perspective. And we are able to largely secure land rights on agreeable terms with landowners.
09:39
09:40
Speaker 1
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Speaker 1
I think from an existing infrastructure point of view there isn't. We've renewed leases, I think, as some of the other panelists will probably allude to, building new sites can be more challenging. You know, you can get resistance to those new sites in areas from either local communities or landowners. And as a result, interaction tends to be more kind of prolonged where you're able to bring the community with you, as we saw in the S 4G programme.
And you've got a kind of a higher chance of that success. We do try to use the compulsion part of the of the IC as a last resort, effectively where it is clearly in the public benefit, and we need to compel deployment.
And you've got a kind of a higher chance of that success. We do try to use the compulsion part of the of the IC as a last resort, effectively where it is clearly in the public benefit, and we need to compel deployment.
09:40
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09:40
Speaker 1
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Speaker 1
Yeah, of course. I think first of all, we need to define what good looks like. So if we look to the past coverage was a very good metric. We could we make voice calls, we send text messages. Now we live in a world, as Alex has alluded to, where people are much more reliant on a wide range of services. And in the mobile market review that's underway, we'd really like to see government articulate a nuanced view of kind of what good quality looks like.
I think government then has a role to support achievement of that. If it sets that standard, industry will step in. Companies like ours are very willing to invest in new infrastructure, as we have done in other European countries where we see that demand signal, but we are going to face a challenge, particularly in Scotland. It will be putting in place enablers to help us upgrade the infrastructure. But fundamentally, in areas that are economically unviable, there's going to be a need for further, further kind of interventions along the way to ensure ultimately that every community and business gets the connectivity it can rely upon.
I think government then has a role to support achievement of that. If it sets that standard, industry will step in. Companies like ours are very willing to invest in new infrastructure, as we have done in other European countries where we see that demand signal, but we are going to face a challenge, particularly in Scotland. It will be putting in place enablers to help us upgrade the infrastructure. But fundamentally, in areas that are economically unviable, there's going to be a need for further, further kind of interventions along the way to ensure ultimately that every community and business gets the connectivity it can rely upon.
09:41
Speaker 2
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Speaker 2
Thank you. I thank you for that question. I think the mobile market review, which Jonathan alluded to, is a really welcome acknowledgement by the government that the investment climate is difficult for those in the UK. We're quite unusual as a sector, and that the share price of every company in working in the UK is lower now than it was ten years ago. Prices in real terms have gone down and not up. Revenues are flat, margins are low.
Our CapEx has never been higher as a business and it is this year, but we are forecasting that both our revenue and our EBITDA will decline slightly. So growth and investment it's quite challenging. And so the MMR, I think is a positive step and recognition by government that how can to thinking about how can public policy increase investor confidence and increase investment. And there are three areas in three topics in that review that I would I would highlight.
I think one is the possibility of net neutrality reform, reforming net neutrality rules so we can innovate more and manage spectrum more effectively and provide bespoke services for customers, which would generate additional revenue for investment in the network. Another one is spectrum fees. Hundreds of millions of pounds are taken out of the sector every year in annual licence fees. Mobile spectrum they are set to increase over time. Amendment of those, which is something the review includes, would generate, would keep more funding in the industry for investment in infrastructure.
And thirdly, spectrum. Data consumption is increasing hugely. There's huge demand for for data services, and that means that having a long term, clear, affordable plan to release spectrum to operators to help cope with that increase in demand is also really important as well. So those three things , net neutrality reform and licence fees and spectrum are things that we really hope the review will will take forward, and we welcome their inclusion.
Our CapEx has never been higher as a business and it is this year, but we are forecasting that both our revenue and our EBITDA will decline slightly. So growth and investment it's quite challenging. And so the MMR, I think is a positive step and recognition by government that how can to thinking about how can public policy increase investor confidence and increase investment. And there are three areas in three topics in that review that I would I would highlight.
I think one is the possibility of net neutrality reform, reforming net neutrality rules so we can innovate more and manage spectrum more effectively and provide bespoke services for customers, which would generate additional revenue for investment in the network. Another one is spectrum fees. Hundreds of millions of pounds are taken out of the sector every year in annual licence fees. Mobile spectrum they are set to increase over time. Amendment of those, which is something the review includes, would generate, would keep more funding in the industry for investment in infrastructure.
And thirdly, spectrum. Data consumption is increasing hugely. There's huge demand for for data services, and that means that having a long term, clear, affordable plan to release spectrum to operators to help cope with that increase in demand is also really important as well. So those three things , net neutrality reform and licence fees and spectrum are things that we really hope the review will will take forward, and we welcome their inclusion.
09:44
Speaker 3
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Speaker 3
Good. Yeah. Yes. I'd echo I don't want to drown you in, but I would have three things as well, rooted in what the committee's just been speaking about. So on the code we think that's good. You know, a lot of hard work went into getting those code reforms. They will help rural coverage massively. If that was unpicked or reopened, that would impede rural coverage. We we're quite certain of that.
So, you know, if there is one ask I could make, please don't reopen the code. It's it's working well, the other the other side of it as well as access is planning reform. We obviously we want to build out our network in Scotland. We've got to. As part of our CMA commitments, we've got some. We've got some fairly low, low grade planning. We don't want to build masks all over the countryside.
We obviously we hit local opposition when that happens. But this is about upgrading masts in certain areas, making masks on rooftops a bit higher. So just extending the permitted development rights to make that a bit smoother. And that will allow us to deploy our capital a lot quicker and to increase coverage a lot quicker as well. And then the third point I'd like to pick on about this critical national infrastructure, because I think it is an important one.
Telecoms, we do feel a bit sore in that we are critical national infrastructure. The Cabinet Office is designated as such. That brings a lot of obligations on things like cybersecurity on coverage, which we're very happy to meet because we understand that it's not always matched in the support we get from government on things like this. And as you say, it's not just on code issues. It it affects us in all kinds of ways. Another one, for instance, data centres, critical national infrastructure, they get energy support.
We're getting absolutely slammed with energy costs. I think on our side, just at Vodafone, three over a quarter of a billion a year and rising no support. So I think that if government as a whole can close the gap between the obligations and the investment challenges, that will go an awfully long way to helping in Scotland and the rest of the UK, but particularly as Scotland is, is lagging on some metrics, it will make a big difference there.
So, you know, if there is one ask I could make, please don't reopen the code. It's it's working well, the other the other side of it as well as access is planning reform. We obviously we want to build out our network in Scotland. We've got to. As part of our CMA commitments, we've got some. We've got some fairly low, low grade planning. We don't want to build masks all over the countryside.
We obviously we hit local opposition when that happens. But this is about upgrading masts in certain areas, making masks on rooftops a bit higher. So just extending the permitted development rights to make that a bit smoother. And that will allow us to deploy our capital a lot quicker and to increase coverage a lot quicker as well. And then the third point I'd like to pick on about this critical national infrastructure, because I think it is an important one.
Telecoms, we do feel a bit sore in that we are critical national infrastructure. The Cabinet Office is designated as such. That brings a lot of obligations on things like cybersecurity on coverage, which we're very happy to meet because we understand that it's not always matched in the support we get from government on things like this. And as you say, it's not just on code issues. It it affects us in all kinds of ways. Another one, for instance, data centres, critical national infrastructure, they get energy support.
We're getting absolutely slammed with energy costs. I think on our side, just at Vodafone, three over a quarter of a billion a year and rising no support. So I think that if government as a whole can close the gap between the obligations and the investment challenges, that will go an awfully long way to helping in Scotland and the rest of the UK, but particularly as Scotland is, is lagging on some metrics, it will make a big difference there.
09:46
09:46
09:46
Speaker 4
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Speaker 4
Yeah. I mean, I'll try and be quick because lots of the same points I guess. But I mean yeah, look investment I think is the key thing. And BT is putting in over the course of the 2020s, we will invest £40 billion in digital infrastructure from fibre to mobile and all sorts of things in between. So there's lots of money going in. But as Sandra was saying, sort of economics of the mobile part of the industry have changed.
So for 20 years it was fine to rely on very competitive dynamic between the operators and the globalization of supply chains, made everything cheaper and easily available. And those dynamics have shifted. And we're in a different world more geopolitically, sort of challenging. And I think we would say the government needs to just think about the industry differently. And yes, all the things we've mentioned, I mean, spectrum in particular, we could really do with a kind of roadmap setting out how we're going to get from where we are now to the sort of better place for national mobile services.
There are sort of two particular bands that we think should be made available 600MHz and another one, 3.8 to 4.2 gigahertz. And a sort of approach to how is that spectrum is taxed and licensed. That helps us to invest more. And all the points about planning. Absolutely. Energy costs super important. I mean, obviously for everyone across the country now, as everyone can, can sort of see, but we get no sort of relief as providers of critical infrastructure and investors in critical infrastructure from any of the kind of levies and charges that apply as the bill for energy costs goes up inexorably.
And we are sort of massive payers, and that causes a real issue for us. And when we look at our investment case. So we're making the case to government for action on that as well. And then yeah, the final point, I guess I would underscore again, as George has said, is about sort of resilience and what it means to be critical national infrastructure providers. I mean, there's an example. We're in the last week, everyone can see around TalkTalk where that company was about to collapse entirely.
And in Scotland, that would have meant 200,000 customers immediately cut off without any kind of protections around it. So there's a question about is there some different way of looking at the industry and looking at regulation in future to try and prevent that situation? And in this in this instance, we were able to step in and sort of perform a kind of rescue. But it does highlight just how important to everyone's everyday lives and their their kind of health, all the sort of telecare systems and all the sort of government and other public sector services that rely on all these networks, how how critical they are to keeping people from day to day safe and secure.
So a series of questions that sort of stem from that as well about do we have the right sort of regime around, you know, from one end of the spectrum around the kind of subsea infrastructure, preventative sort of measures to try and protect that kind of capacity to repair quickly the availability of more than one sort of cable repair ship at any given time and through to the sort of investments that are needed in resilience for the networks, both mobile and fixed, in terms of battery backup and generators and satellites provision, all the sort of things that you need to put around all of that.
And I think an open question about whether the industry alone can manage all that's necessary, or if actually there's a case for some public investment as well, to provide a level of resilience that we're going to expect in the future.
So for 20 years it was fine to rely on very competitive dynamic between the operators and the globalization of supply chains, made everything cheaper and easily available. And those dynamics have shifted. And we're in a different world more geopolitically, sort of challenging. And I think we would say the government needs to just think about the industry differently. And yes, all the things we've mentioned, I mean, spectrum in particular, we could really do with a kind of roadmap setting out how we're going to get from where we are now to the sort of better place for national mobile services.
There are sort of two particular bands that we think should be made available 600MHz and another one, 3.8 to 4.2 gigahertz. And a sort of approach to how is that spectrum is taxed and licensed. That helps us to invest more. And all the points about planning. Absolutely. Energy costs super important. I mean, obviously for everyone across the country now, as everyone can, can sort of see, but we get no sort of relief as providers of critical infrastructure and investors in critical infrastructure from any of the kind of levies and charges that apply as the bill for energy costs goes up inexorably.
And we are sort of massive payers, and that causes a real issue for us. And when we look at our investment case. So we're making the case to government for action on that as well. And then yeah, the final point, I guess I would underscore again, as George has said, is about sort of resilience and what it means to be critical national infrastructure providers. I mean, there's an example. We're in the last week, everyone can see around TalkTalk where that company was about to collapse entirely.
And in Scotland, that would have meant 200,000 customers immediately cut off without any kind of protections around it. So there's a question about is there some different way of looking at the industry and looking at regulation in future to try and prevent that situation? And in this in this instance, we were able to step in and sort of perform a kind of rescue. But it does highlight just how important to everyone's everyday lives and their their kind of health, all the sort of telecare systems and all the sort of government and other public sector services that rely on all these networks, how how critical they are to keeping people from day to day safe and secure.
So a series of questions that sort of stem from that as well about do we have the right sort of regime around, you know, from one end of the spectrum around the kind of subsea infrastructure, preventative sort of measures to try and protect that kind of capacity to repair quickly the availability of more than one sort of cable repair ship at any given time and through to the sort of investments that are needed in resilience for the networks, both mobile and fixed, in terms of battery backup and generators and satellites provision, all the sort of things that you need to put around all of that.
And I think an open question about whether the industry alone can manage all that's necessary, or if actually there's a case for some public investment as well, to provide a level of resilience that we're going to expect in the future.
09:49
Dave Doogan
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Dave Doogan
Thanks, chair. We've heard that there remains some stubborn areas of Scotland with poor coverage and in big handfuls, the big ticket items over the next 5 to 10 years. What is the industry going to do to close that gap? And and we can be we can be as brief as you like on that, because I think we've covered some of it already. If we start with you, Mr. Freeman.
09:50
09:50
09:50
Speaker 1
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Speaker 1
Yeah. I think we talked about in those rural areas, there's going to need to be further kind of interventions and support. The two programmes run to date, the s 4G programme, run by the Scottish Government and the SRN programme kind of had different objectives. So s 4G was about kind of providing capacity and coverage into communities and local businesses. SRM was a bit more focused at geographic coverage, and if we look at that, that stubborn as you frame it part, it's going to be more SRN style interventions that we're going to need in those areas.
And we as a company have built a large volume of sites across Europe and are willing to put our own private capital into that. But what we do need is that investment signal from government and that commitment to that. But fundamentally, it will be very similar to what's gone before. We'll need to build sites in more challenging areas. So things like preferential access to get to power, to be able to upgrade those power supplies where required, and that favourable planning regime will see us start to start to close that gap.
And, and I think the other thing I'd point out is that a large amount of the benefit that is going to come from upgrading infrastructure, as George and others have spoken to. So continuing that journey, we've actually rolled out 5G a lot faster than 4G, but it is now having an impact on the infrastructure. And we do need to make it slightly bigger, slightly larger, slightly stronger. So it's a combination of the two, continuing that acceleration of upgrade to close the kind of the capacity gap, and then further interventions to kind of deal with the coverage side of things.
And we as a company have built a large volume of sites across Europe and are willing to put our own private capital into that. But what we do need is that investment signal from government and that commitment to that. But fundamentally, it will be very similar to what's gone before. We'll need to build sites in more challenging areas. So things like preferential access to get to power, to be able to upgrade those power supplies where required, and that favourable planning regime will see us start to start to close that gap.
And, and I think the other thing I'd point out is that a large amount of the benefit that is going to come from upgrading infrastructure, as George and others have spoken to. So continuing that journey, we've actually rolled out 5G a lot faster than 4G, but it is now having an impact on the infrastructure. And we do need to make it slightly bigger, slightly larger, slightly stronger. So it's a combination of the two, continuing that acceleration of upgrade to close the kind of the capacity gap, and then further interventions to kind of deal with the coverage side of things.
09:51
Speaker 2
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Speaker 2
Thank you. The government's ambition for 5G plus is for that to be in all populated areas by 2030. And that's the target we are working to. We will in due course. I mean, that's three years away, but we will, in due course, map out our next steps and our and our ambitions beyond that. But I think the focus has to be on those areas where there is currently no coverage and working hard to try and improve the situation in, in those areas, I think I think the the biggest challenge is in areas which currently have little or no coverage, rather more than premises reached, which is a pretty high level at the moment.
But the priority will be, I think, working on those trying to get coverage to those remoter areas.
But the priority will be, I think, working on those trying to get coverage to those remoter areas.
09:52
Speaker 3
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Speaker 3
Yeah, I swan coverage. There is a bit of an emerging industry regulator view coverage. We are making good progress now. It might not feel like it to some constituents, but things are moving in the right direction. And you should hopefully in the next in the coming months, years really start to feel that terrestrial. So the ground masts or rooftops or whatever on planet earth they are, we're rolling that out at pace as part of our merger commitment, as I said.
So that is over 99% of people, nearly 90% of landmass will be covered by 5G standalone. So really good quality 5G. The remainder is tricky for terrestrial just because again, the economics are very hard. These are very remote areas. That's where there is satellite, and satellite is beginning to come on. So certainly for us, we're partnering with a company called AST. We've already had Ofcom approved use of our spectrum for those satellites in the constellation goes live testing hopefully early next year.
That will then start to. And as well , this is satellite coverage that is beginning to get quite rich. So it's not just a backstop, it's satellite coverage that can do certain things that previously terrestrial coverage could get. You still absolutely need your base terrestrial coverage, but satellite is going to be able to fill those hot spots to a really good extent. So that's an exciting development for the industry. And that's something that a lot of attention, a lot of thought is going into, and which operators are all lining up propositions to sort that.
So that's, that's what coverage. I think the only but I, I came to this committee a few a few months ago, and I think you've got coverage, affordability and quality. We've had a government that's been absolutely focused on coverage and affordability and reach those very well. But now the attention is how do we deliver good quality? So even if you've got bars on your phone, are you actually being able to do what you need to do on your phone? And Ofcom are doing a lot of good work in that, but that's where the priority now needs to shift.
So that is over 99% of people, nearly 90% of landmass will be covered by 5G standalone. So really good quality 5G. The remainder is tricky for terrestrial just because again, the economics are very hard. These are very remote areas. That's where there is satellite, and satellite is beginning to come on. So certainly for us, we're partnering with a company called AST. We've already had Ofcom approved use of our spectrum for those satellites in the constellation goes live testing hopefully early next year.
That will then start to. And as well , this is satellite coverage that is beginning to get quite rich. So it's not just a backstop, it's satellite coverage that can do certain things that previously terrestrial coverage could get. You still absolutely need your base terrestrial coverage, but satellite is going to be able to fill those hot spots to a really good extent. So that's an exciting development for the industry. And that's something that a lot of attention, a lot of thought is going into, and which operators are all lining up propositions to sort that.
So that's, that's what coverage. I think the only but I, I came to this committee a few a few months ago, and I think you've got coverage, affordability and quality. We've had a government that's been absolutely focused on coverage and affordability and reach those very well. But now the attention is how do we deliver good quality? So even if you've got bars on your phone, are you actually being able to do what you need to do on your phone? And Ofcom are doing a lot of good work in that, but that's where the priority now needs to shift.
09:54
09:54
Speaker 4
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Speaker 4
Yeah, I mean we've all of those things and yes, quality is the thing which we also will get to 99% 5G plus by 2030. But that doesn't mean everyone gets the best possible service that they might want need. Absolutely everywhere. So I think we gave the government something like a 40 point list for their mobile market review. And these are not, you know, there's no one big sort of easy lever to pull that fixes this problem for everyone.
But there's lots of small things that can be done. All the things we've been talking about, I guess, and satellite can be part of the answer. I think, as you know, we will get to 99% coverage with with terrestrial 5G. So it's very much for the kind of final sort of proportion, but it's also very helpful in terms of the resilience of the mobile network itself, not, not, not the service that customers get, but the way in which we can back up our systems in case there is an issue with a cable or, or some other part of what they call the backhaul.
So it's an important part of the mix. But the other point that we haven't mentioned, but is also relevant and is relevant across the UK and in Scotland as well, is there are gaps around transport networks as well, and particularly trains, where that is still a massive frustration for sort of everyday customers day to day. And that's one of those places where the economics don't quite stack up for individual operators to properly fix that problem.
And there's a there's a question for the government and for Network Rail in particular, who could help fix it with a bit of investment and a bit of a more imaginative approach to using the existing infrastructure that is there on the railways already to resolve the problem. That is sort of massively aggravating for lots of people every day.
But there's lots of small things that can be done. All the things we've been talking about, I guess, and satellite can be part of the answer. I think, as you know, we will get to 99% coverage with with terrestrial 5G. So it's very much for the kind of final sort of proportion, but it's also very helpful in terms of the resilience of the mobile network itself, not, not, not the service that customers get, but the way in which we can back up our systems in case there is an issue with a cable or, or some other part of what they call the backhaul.
So it's an important part of the mix. But the other point that we haven't mentioned, but is also relevant and is relevant across the UK and in Scotland as well, is there are gaps around transport networks as well, and particularly trains, where that is still a massive frustration for sort of everyday customers day to day. And that's one of those places where the economics don't quite stack up for individual operators to properly fix that problem.
And there's a there's a question for the government and for Network Rail in particular, who could help fix it with a bit of investment and a bit of a more imaginative approach to using the existing infrastructure that is there on the railways already to resolve the problem. That is sort of massively aggravating for lots of people every day.
09:56
Dave Doogan
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Dave Doogan
Indeed. And to any of you who wish to answer this one, the 3G network was switched off. To what extent has that exacerbated either the coverage or the quality of provision, and what discussion was had before that switch off, if it has had an effect, was that effect anticipated and quantified, or have we been a little bit surprised and wrong footed by that?
09:56
09:56
Speaker 4
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Speaker 4
What we can see. And there are a series of transitions that was, you know, one of the first series of transitions happening. We are in the middle of a transition for everyone's landlines from analog to digital. 3G has happened. 2G will happen in the next two or so years. And we're currently planning that. And it's part of a necessary part of effectively upgrading everyone's service. 2G, I think, accounts for something like 0.1% currently of the traffic across our total network.
So again, we're fairly confident that we can retire that use the sort of equipment and the spectrum more effectively for other purposes without causing people a problem. But we need to clearly be very careful in how we manage each of these transitions.
So again, we're fairly confident that we can retire that use the sort of equipment and the spectrum more effectively for other purposes without causing people a problem. But we need to clearly be very careful in how we manage each of these transitions.
09:57
Speaker 3
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Speaker 3
And government and ourselves take this very seriously. Obviously, if you are retiring something that people are reliant on. So there's a lot of stage processes you go through to, to look at what alternative provision is put in place. Already 3G was very much done on a gradated process. We update government every step of the way as they as they asked us to as well. Quite rightly so. And as Alex says, that's being replicated now across other retirement of legacy networks.
So we we take this incredibly seriously, and we think 3G was done in a responsible way.
So we we take this incredibly seriously, and we think 3G was done in a responsible way.
09:58
Speaker 2
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Speaker 2
Yeah. I mean, it was 3G switch off. We were the last operator to switch off 3G, but this was literally years in the planning. And it and it advances. Switching it off, we ran a number, as I'm sure my colleagues did, of pilots, regional pilots, regional switch offs, you know, to test the impact on the network, we worked very hard to ensure that where 3G was going to be switched off, there would be capacity and coverage to pick up, pick that up from those who who previously used 3G.
So it was a very carefully, incrementally planned process where we worked hand in glove, as George said, both with the government and with local authorities. And just one more comment, if I may, on satellite, just to return to that briefly. Yes, that will have an increasingly important role to play, I think. But it's important to recognise that it's already being deployed. I mean, we have used satellite to give backhaul links back to the core network from remote sites, and we launched O2 satellite early this year, which is a satellite to device service, which has lifted our coverage footprint up, something like 95% of UK landmass and is of particular value in bringing coverage to not spot areas.
Yeah.
So it was a very carefully, incrementally planned process where we worked hand in glove, as George said, both with the government and with local authorities. And just one more comment, if I may, on satellite, just to return to that briefly. Yes, that will have an increasingly important role to play, I think. But it's important to recognise that it's already being deployed. I mean, we have used satellite to give backhaul links back to the core network from remote sites, and we launched O2 satellite early this year, which is a satellite to device service, which has lifted our coverage footprint up, something like 95% of UK landmass and is of particular value in bringing coverage to not spot areas.
Yeah.
09:59
Douglas Lumsden
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Douglas Lumsden
09:59
09:59
09:59
09:59
09:59
Angus MacDonald
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Angus MacDonald
George Robinson has had the thick end of our tongue before, but the three of you have yet to have it. So I represent Inverness, Skye and Wester Ross. Okay. And the chances are they're amongst your most difficult landmass to cover on the West Coast. And I live in an area which is not, which is reasonably populated, i.e. there's 50 houses if I want to get any bank access and they send me a text, I have to run like hell down the garden, get my text, run back and enter it into the computer before it times out.
So that that happens to me and that happens to our whole community. So we do not have mobile coverage in a reasonable community where I live. And your statistics here, I'm just going to read a little bit. Scotland has roughly 80% of 4G for 80% 4G geographic coverage, compared to 90% in the UK. And for 5G, it's 48% in Scotland versus 73% the UK. Where I live, I suspect in the West Highlands it's down at 30%.
So there is a there is a major crisis going on with the school rolls in the West Highlands have halved, so Portree High School was built for 1500 people there. And the professional people are moving away. And lack of communications is an important reason or is a major reason why they are moving away. So we sit around here and the numbers sound great, 90% moving this, we're going to achieve that.
The net result is we are seeing massive depopulation in remote Scotland significantly because our communications is not good enough. And and so, you know, I leave this meeting thinking you guys are all thinking you're doing really well and I think you're doing really badly. So, I mean, I hate to say that as a reality of it.
So that that happens to me and that happens to our whole community. So we do not have mobile coverage in a reasonable community where I live. And your statistics here, I'm just going to read a little bit. Scotland has roughly 80% of 4G for 80% 4G geographic coverage, compared to 90% in the UK. And for 5G, it's 48% in Scotland versus 73% the UK. Where I live, I suspect in the West Highlands it's down at 30%.
So there is a there is a major crisis going on with the school rolls in the West Highlands have halved, so Portree High School was built for 1500 people there. And the professional people are moving away. And lack of communications is an important reason or is a major reason why they are moving away. So we sit around here and the numbers sound great, 90% moving this, we're going to achieve that.
The net result is we are seeing massive depopulation in remote Scotland significantly because our communications is not good enough. And and so, you know, I leave this meeting thinking you guys are all thinking you're doing really well and I think you're doing really badly. So, I mean, I hate to say that as a reality of it.
10:01
10:01
Angus MacDonald
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Angus MacDonald
The question is when can you get it sorted by? And you know, George, you've answered this before about things like sharing masts. You know, we were in the Faroe Islands and the head of the telecoms saying, he said, you don't understand it. If you shared masts, the problem would be largely resolved or significantly resolved.
10:02
Speaker 3
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Speaker 3
I, I do, I'll do a quick supplement. So I would say the principle is, yeah, we can talk about facts and figures. If it's not the lived experience, then it's not cutting through. So that is very important. And I rural roaming, I think if if there's no signal, there's no signal for any of us to roam to. So that is where neutral host architecture can be useful, which I'm sure Jonathan will, will, will expand upon.
And I would say as well, we are responsible on the roaming side. We do try and share our masts and our kit where everywhere it makes sense. So certainly Vodafone three because of our merger we actually share sites with BT. We share kit with VMO two. We use neutral hosts. So we do an awful lot of sharing where sharing makes sense. We do try and do it while also where you can protect the principles of in the areas where there is good coverage and competition is driving that investment.
Yes. So the system, we do try and do it in a sophisticated way that does ensure that you you're not you have as few of these instances as possible. And it does show the importance of connectivity. If that's a driver of depopulation, that's a huge issue. And that's something that we we need to sort.
And I would say as well, we are responsible on the roaming side. We do try and share our masts and our kit where everywhere it makes sense. So certainly Vodafone three because of our merger we actually share sites with BT. We share kit with VMO two. We use neutral hosts. So we do an awful lot of sharing where sharing makes sense. We do try and do it while also where you can protect the principles of in the areas where there is good coverage and competition is driving that investment.
Yes. So the system, we do try and do it in a sophisticated way that does ensure that you you're not you have as few of these instances as possible. And it does show the importance of connectivity. If that's a driver of depopulation, that's a huge issue. And that's something that we we need to sort.
10:03
Speaker 1
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Speaker 1
Yes, it's building on what George said, absolutely respect the lived experience people have. I think from what we see, we're a European company. Actually in UK, it's one of the highest levels of sharing of any country in Europe. So we have 1200 sites. In Scotland. We have about 2200 no points of presence. So there's kind of a sharing ratio of about 1.7 there. If we look at the S 4G programme, actually the sharing is up at two and a half, 2.6.
You've got nearly every operator on every single site that was deployed. So I don't believe this is a problem of a lack of sharing. The UK telecoms industry has actually done a fantastic job of sharing neutral hosts, such as us and our other competitors in that space. This is our reason. This is our business model. We want as many companies to join as possible, including Non-malays. We host other other providers on it.
So I think, as George pointed out, to close that experiential gap, it's going to be new infrastructure. It's there's always more we can do. There's always more we can share on, but it's actually already pretty high the sharing. So it's going to be about finding better and more efficient ways to deploy new infrastructure to then bring that service to constituents. So they get the the lived experience that they, they would hope for.
You've got nearly every operator on every single site that was deployed. So I don't believe this is a problem of a lack of sharing. The UK telecoms industry has actually done a fantastic job of sharing neutral hosts, such as us and our other competitors in that space. This is our reason. This is our business model. We want as many companies to join as possible, including Non-malays. We host other other providers on it.
So I think, as George pointed out, to close that experiential gap, it's going to be new infrastructure. It's there's always more we can do. There's always more we can share on, but it's actually already pretty high the sharing. So it's going to be about finding better and more efficient ways to deploy new infrastructure to then bring that service to constituents. So they get the the lived experience that they, they would hope for.
10:04
Speaker 2
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Speaker 2
Yeah. Sorry. Forgive me. We've been sharing infrastructure with Vodafone since 2012. And at the core of the shared rural network program was infrastructure sharing by all four operators. So I think it's been going on for a long time. I think there's more now than there was five years ago. There'll be more in five years than there is now, and that's certainly the direction that we need to need to go in.
Thank you.
Thank you.
10:05
10:05
Speaker 4
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Speaker 4
We're probably going to go back around some of the same territory we were just in really. I mean, look, I mean, I think we would say in aggregate quite, very successful actually in terms of the difference it's made to closing those big kind of numbers in terms of gaps in coverage and the fact that most of the infrastructure, the SRN and the the Scottish Government's 4G infill has been of the sort that has allowed operators to share. And so brings that kind of wider benefit.
So that has been a really positive intervention. And then the question is clearly, as in your case, there remains a percentage that it doesn't cover and no consolation at all to you that there is a kind of, you know, in aggregate, these sort of larger numbers where it has been a success. So that remains.
So that has been a really positive intervention. And then the question is clearly, as in your case, there remains a percentage that it doesn't cover and no consolation at all to you that there is a kind of, you know, in aggregate, these sort of larger numbers where it has been a success. So that remains.
10:06
Angus MacDonald
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Angus MacDonald
A question. Can I actually change my question a little bit? So originally it was about landmass covered rather than population covered. And I was on the Highland Council planning committee, and we would get all these SRN applications and it completely snarled up the whole planning committee. And then I got my new job and I arrive and we sit down with Chris Bryant. At the time, was the minister involved, and we explained that we really didn't need masts 12 miles up a glen where nobody lived, and it would be much better to put them on, you know, the coastal areas on hills where we could make the difference.
So I think very sensibly, the government have reduced the number of SRN masks required in remote, remote glens, but we haven't seen them instead being replaced in places where we think we need the demand. And I don't know if you've got any input on that.
So I think very sensibly, the government have reduced the number of SRN masks required in remote, remote glens, but we haven't seen them instead being replaced in places where we think we need the demand. And I don't know if you've got any input on that.
10:07
Speaker 4
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Speaker 4
Yeah, well, look in transparently. So the first part of the programme was delivered by the industry, and that was to close mostly what we called partial not spots. And then the total hotspots. That was where the government were due to sort of make an intervention. And you're right, it's sensibly they sort of took a view, I think, that places that were literally kind of, most of the time empty may not need a new bit of infrastructure, but they have reduced the amount of of funding they were going to put in.
So that is a change. And what we're talking about in the end, I think, is a question of, of potential market failure for a place that where there may not be a business case for any of our competitive purposes, any of us to, to put new infrastructure, then what is the answer to that? And maybe there is a sort of neutral host shared bit of infrastructure that would require some sort of public investment, for example. But that remains, I think, a sort of a live question for communities that haven't yet got the infrastructure they want or need.
So that is a change. And what we're talking about in the end, I think, is a question of, of potential market failure for a place that where there may not be a business case for any of our competitive purposes, any of us to, to put new infrastructure, then what is the answer to that? And maybe there is a sort of neutral host shared bit of infrastructure that would require some sort of public investment, for example. But that remains, I think, a sort of a live question for communities that haven't yet got the infrastructure they want or need.
10:08
Speaker 1
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Speaker 1
I think the two programmes were very differently designed. As I mentioned in my earlier answer, the programme was about covering communities and businesses. SRM was largely about increasing geographic coverage, and I think that's at the heart of the policy decision we have to decide upon for future intervention, because if you design the programme with the right objectives, then you'll build the associated infrastructure. As we saw with SRN, it led to infrastructure being placed for geographic coverage, which may be important in the future as things like agribusiness, advanced logistics cases kind of emerge.
We may actually need that coverage there for that. But today we understand, obviously, from your constituents point of view, that's the pressing priority for them, not those kind of future use cases, but they are very different how they were designed as programmes and what they were designed to achieve. So I think we need to always think at the start, what outcome are we trying to get to here? Because it can lead to kind of unintended consequences.
We may actually need that coverage there for that. But today we understand, obviously, from your constituents point of view, that's the pressing priority for them, not those kind of future use cases, but they are very different how they were designed as programmes and what they were designed to achieve. So I think we need to always think at the start, what outcome are we trying to get to here? Because it can lead to kind of unintended consequences.
10:09
10:09
Speaker 1
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Speaker 1
Certainly. So 4G, the UK was relatively late to actually roll out that technology from by international standards, and it took quite a long time to roll out. So it took a long time for that. I think there's been an awful lot learned from that programme, which has meant 5G. We were one of the first countries to start the rollout and it's accelerated much more quickly. I my colleagues here will no doubt speak from a kind of more of a networks point of view from an infrastructure point of view.
What we've learned, though, is that we do need to get ahead of the curve. We need to be upgrading the infrastructure, the physical metal work, if you like, to make it stronger, slightly taller, slightly bigger in advance because the new equipment is much heavier, it's much larger, but it has a much more of a bigger impact. So the big lesson we learned was the idea that you need to prepare the infrastructure. The thing that's perhaps been more challenging is 5G uses a lot more power, as we see by the consumption the operators have, and we weren't, and we've not to date yet been able to get that access to upgraded power and an easy way, like many other industries kind of in across the UK and Scotland.
So getting those power upgrades and getting prioritised in that queue is challenging. So we can have sites that are built, have all the equipment on them, but they are sat there waiting for kind of the power upgrades to switch on the 5G part. I think we learned the lessons around the infrastructure side, but perhaps the new challenge now becomes more around the power. And if we can get a little bit more on the planning side, that will help accelerate things as well.
What we've learned, though, is that we do need to get ahead of the curve. We need to be upgrading the infrastructure, the physical metal work, if you like, to make it stronger, slightly taller, slightly bigger in advance because the new equipment is much heavier, it's much larger, but it has a much more of a bigger impact. So the big lesson we learned was the idea that you need to prepare the infrastructure. The thing that's perhaps been more challenging is 5G uses a lot more power, as we see by the consumption the operators have, and we weren't, and we've not to date yet been able to get that access to upgraded power and an easy way, like many other industries kind of in across the UK and Scotland.
So getting those power upgrades and getting prioritised in that queue is challenging. So we can have sites that are built, have all the equipment on them, but they are sat there waiting for kind of the power upgrades to switch on the 5G part. I think we learned the lessons around the infrastructure side, but perhaps the new challenge now becomes more around the power. And if we can get a little bit more on the planning side, that will help accelerate things as well.
10:10
Speaker 2
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Speaker 2
Yeah, I think the key learning from the Shared Rural Network programme, which was about 4G, was that it's really difficult to punch a hole in those areas of total, not spot coverage. If you judge the SRN programme by the objectives it set, it has been a success. I think, as I mentioned earlier, that the the landmass in Scotland, where you can get 4G signal from all operators, went from 41 to 71. Our UK landmass coverage is at 88% and was by the end of 2024, which is a key target of the SRN programme.
We'll all be at 90% by the end of this year and our collective footprint, our combined coverage footprint is at 95%. So that's that's been a success. The real I think the key learning is how difficult it is for a combination of economics and, and community and landlord and planning authority consent, how difficult it is to, to build in those areas. And it is a source of some frustration.
I think that the industry invested half £1 billion roughly, in addressing partial not spots. The total not spot part of that program was funded by government, and that was significantly scaled back because we couldn't get permission to build the sites and the total hotspot areas. And you can argue that it was sensible to a scale it down and be focused more on premises and those places, tourist destinations, etc., where where more people are to be found.
But that that has been it's a little frustrating that I mean, in that particular case, money wasn't the problem really. You know, a lot of that government money went back to the Treasury because we had to admit defeat on building sites where we wanted to. So I think that's that's a key learning that that is the real challenge. And I think some of the challenges that we have in remote, remote sites in Scotland, we will continue to have with 5G.
I think it's these are very remote sites, you know, many miles from roads. They might require helicopter builds or or ferry transport to get the sites in. Getting backhaul back to the core network could be a challenge. Getting power to the sites could be a challenge. We've got some sites, total hotspot sites that have been built and ready to go since last year, but we still don't have power now. We're working hard with SSE to put that right and I think we're going to solve that issue.
But I think that too can be a can be a cause of delay.
We'll all be at 90% by the end of this year and our collective footprint, our combined coverage footprint is at 95%. So that's that's been a success. The real I think the key learning is how difficult it is for a combination of economics and, and community and landlord and planning authority consent, how difficult it is to, to build in those areas. And it is a source of some frustration.
I think that the industry invested half £1 billion roughly, in addressing partial not spots. The total not spot part of that program was funded by government, and that was significantly scaled back because we couldn't get permission to build the sites and the total hotspot areas. And you can argue that it was sensible to a scale it down and be focused more on premises and those places, tourist destinations, etc., where where more people are to be found.
But that that has been it's a little frustrating that I mean, in that particular case, money wasn't the problem really. You know, a lot of that government money went back to the Treasury because we had to admit defeat on building sites where we wanted to. So I think that's that's a key learning that that is the real challenge. And I think some of the challenges that we have in remote, remote sites in Scotland, we will continue to have with 5G.
I think it's these are very remote sites, you know, many miles from roads. They might require helicopter builds or or ferry transport to get the sites in. Getting backhaul back to the core network could be a challenge. Getting power to the sites could be a challenge. We've got some sites, total hotspot sites that have been built and ready to go since last year, but we still don't have power now. We're working hard with SSE to put that right and I think we're going to solve that issue.
But I think that too can be a can be a cause of delay.
10:13
Speaker 3
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Speaker 3
Yeah. As a building as well. So one thing about the 5G rollout is we do now have a lot of the masts. So when they need to be upgraded in future, the sites are there. So that is good in some ways. A lot of the pain we're going through the building pain now. So I think of our 3500 sites in Scotland of the upgrade programme, only 250 are new. So that's obviously a much smaller proportion.
And having to build all of those as new sites. So that helps. I think though that, you know, where do we how do you supplement that? Next there is the satellite angle. How do we make sure satellites done as well as possible and does fill remaining gaps? There's also small cells. So like small boxes that you put across cities and just to supplement coverage and where it's needed. So how can that be done as effectively as possible? That's something which operators are doing now, but it will as it becomes increasingly so.
How do we, you know, as we've made it easier to build, how do we make it easier, as easy as possible to build out small cells, the demographics versus landmass challenge. Yeah. So I think because we're doing all of this, and I know DCMs is talking to us all individually because it's sensitive information. But once we've built out our networks, as we've said we are now , where are those gaps left? And and then we can have a sensible discussion with government.
How do we how do we fill those. And maybe that was a lesson. If we are doing areas that did not need coverage through the NSS, why did we not do areas in your constituency? First? How do we make sure that that doesn't replicate itself? I think that's a lot of where it really boils down to is understanding. We're all doing these amazing build programmes. Where are the gaps going to be and how do we make sure they're filled in good time?
And having to build all of those as new sites. So that helps. I think though that, you know, where do we how do you supplement that? Next there is the satellite angle. How do we make sure satellites done as well as possible and does fill remaining gaps? There's also small cells. So like small boxes that you put across cities and just to supplement coverage and where it's needed. So how can that be done as effectively as possible? That's something which operators are doing now, but it will as it becomes increasingly so.
How do we, you know, as we've made it easier to build, how do we make it easier, as easy as possible to build out small cells, the demographics versus landmass challenge. Yeah. So I think because we're doing all of this, and I know DCMs is talking to us all individually because it's sensitive information. But once we've built out our networks, as we've said we are now , where are those gaps left? And and then we can have a sensible discussion with government.
How do we how do we fill those. And maybe that was a lesson. If we are doing areas that did not need coverage through the NSS, why did we not do areas in your constituency? First? How do we make sure that that doesn't replicate itself? I think that's a lot of where it really boils down to is understanding. We're all doing these amazing build programmes. Where are the gaps going to be and how do we make sure they're filled in good time?
10:15
Speaker 4
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Speaker 4
Yeah, and I haven't got much to add. As George said, the sites are sort of mostly now built, which is a massive help in towns and cities. It's still all the planning issues, massively relevant to small cells and upgrades. And any time a landlord wants to remove a site that is a painful process with not enough time, we think to give us a chance to find an alternative site. So all those issues continue. And I mean, the other thing, I suppose to learning from the 4G experience and thinking about 5G is this point about kind of resilience, in particular with, you know, increasing frequency of extreme weather events and climate change.
And there is an obvious vulnerability in sort of major storms that has been a particular issue in parts of Scotland, and that remains a vulnerability. We still feel like we don't get a kind of sort of priority ranking in terms of who it is that the energy operators have to attend to first when there is a power outage, and we think there's more that can be done to just join up the planning across telecoms and energy networks, because they are so interdependent.
And if you were just a normal person, you clearly need kind of both to go about your ordinary life. So there's a there's a point there.
And there is an obvious vulnerability in sort of major storms that has been a particular issue in parts of Scotland, and that remains a vulnerability. We still feel like we don't get a kind of sort of priority ranking in terms of who it is that the energy operators have to attend to first when there is a power outage, and we think there's more that can be done to just join up the planning across telecoms and energy networks, because they are so interdependent.
And if you were just a normal person, you clearly need kind of both to go about your ordinary life. So there's a there's a point there.
10:16
10:16
Speaker 3
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Speaker 3
The stats do show that certainly on 4G and 5G, Scotland has lagged. So on our rollout programmes, though, we're absolutely focused on on filling that, that gap. And then the question we're going to have to tackle in industry, what is six G. But then how do we make sure that we do implement six G as well as possible? I'd also say it's a UK issue. The stats do speak for themselves that as a country we have been slow in 4G and 5G rollout for various reasons, mostly the economics.
How do we make the economics work? We've got very good affordability in the UK, but then that does mean the investment envelope is smaller, that that was really the story of 4G and 5G. And now as we look to Ofcom, Ofcom say it themselves, we're bottom third of OECD countries for connectivity. We're desperate to get to the top, top third, top 10%. We're laser focused on that. And again, that's we've spoken earlier the issues we're talking to government about to try and solve that.
How do we make the economics work? We've got very good affordability in the UK, but then that does mean the investment envelope is smaller, that that was really the story of 4G and 5G. And now as we look to Ofcom, Ofcom say it themselves, we're bottom third of OECD countries for connectivity. We're desperate to get to the top, top third, top 10%. We're laser focused on that. And again, that's we've spoken earlier the issues we're talking to government about to try and solve that.
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10:17
Dave Doogan
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Dave Doogan
Thank you chair Mr. Robinson . Vodafone three are a massive corporation with a global footprint. So how does the UK and its rollout compare to the other markets that Vodafone operates within? I'm thinking in terms of what you said there, that we were, you know, a bit slow in the rollout and that was mostly down to the economics. Yeah. How is how does it differ in other countries around the world? What different approach? For example, I was fortunate enough a few years ago to be up at the top of a mountain inside the Arctic Circle, at the very top of Norway, where they had full 5G coverage, to my great surprise.
Yeah. What what have they done differently that we could learn from here?
Yeah. What what have they done differently that we could learn from here?
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Speaker 3
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Speaker 3
Yes, yes, yes, I so again, Europe as a whole, the competitiveness of telecoms in Europe is very high compared to other countries. And when you look at affordability, you can get a SIM for about £6 in the UK versus in the US it's $50. And we're not saying, you know, we don't want skyrocketing prices. But I think there's just an understanding of 20% of the market is run by virtual network operators as well. So it drives huge amounts of competition.
Obviously, countries like Norway and Norway are not particularly close to. So I can't say exactly why they are so far ahead. I am aware they are far ahead. I'm also aware a lot of the other countries in the in the Far East, so Singapore, Japan, South Korea, I think South Korea is the 5G leader. They've got incredible, incredible coverage there. I think gigabit level speeds of mobile. How have they done that? I think I think again, where the every country is different.
So where the countries are a bit smaller and easier to cover that geographic space, that always does help where you've got good planning rules. I know it might seem. Why does planning have such an impact? It has a huge impact if you can deploy quickly. So certainly I know our mast height rules are the most stringent in the UK compared to other countries. I think in some countries you can build pretty freely up to 50m.
Here it's pretty it's 15, 20m protected land everywhere. So again, where can we make sensible changes there? So that that's that's marked us. So we've got those problems. Europe as a whole very competitive markets that drive very low prices, that drive very that drive smaller investment envelopes and planning. A lot of it does come back to planning as well. Okay.
Obviously, countries like Norway and Norway are not particularly close to. So I can't say exactly why they are so far ahead. I am aware they are far ahead. I'm also aware a lot of the other countries in the in the Far East, so Singapore, Japan, South Korea, I think South Korea is the 5G leader. They've got incredible, incredible coverage there. I think gigabit level speeds of mobile. How have they done that? I think I think again, where the every country is different.
So where the countries are a bit smaller and easier to cover that geographic space, that always does help where you've got good planning rules. I know it might seem. Why does planning have such an impact? It has a huge impact if you can deploy quickly. So certainly I know our mast height rules are the most stringent in the UK compared to other countries. I think in some countries you can build pretty freely up to 50m.
Here it's pretty it's 15, 20m protected land everywhere. So again, where can we make sensible changes there? So that that's that's marked us. So we've got those problems. Europe as a whole very competitive markets that drive very low prices, that drive very that drive smaller investment envelopes and planning. A lot of it does come back to planning as well. Okay.
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10:20
Patricia Ferguson
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Patricia Ferguson
I don't know if any of you will be able to answer this question, but if any of you can, I'd be really interested. So if at the conclusion of the Shared Rural Network project, 9% of Scotland's landmass will be without 4G connectivity, how does that translate to community and to people? Is there has work been done to identify that, and if so, what? What are those areas? If you know, sorry, I'll look for a willing volunteer for that one because I realise it's slightly tricky.
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Speaker 3
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Speaker 3
As I was the last one. I get nine so 90% landmass, but 99% population coverage. So that is where population coverage is very useful. Obviously, you know that remaining 1% there will be some where it is particularly hard, but it's also making sure when it is saying 99% that you are getting that coverage as well. And that's the work that Ofcom is doing, which we're supporting, which is making sure that when, when, when the map says you've got coverage, you actually can use your phone.
It just it's not just an icon on your phone, but but it's usable. Yeah.
It just it's not just an icon on your phone, but but it's usable. Yeah.
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Speaker 4
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Speaker 4
I think that is the key key point 99% population coverage in terms of economic activity should deliver most of what we want to. And if the landmass that's not covered is effectively mostly empty, then perhaps that's, you know, the definitely important questions to think about around agribusiness and all that sort of stuff. But if it's really literally empty mountainous terrain and maybe that's not such a problem.
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Speaker 3
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Speaker 3
So so 4G and 5G and 5G. SA that's now our target really is to make sure you are getting this good coverage. So 90% on terrestrial, I think the remainder where we can work with Scottish Government, where we can work with neutral host providers that will go some way. And then satellite is the other play. And as I said, satellite is a nascent technology, but it is getting to a point now where it can start to provide a level of coverage where you can do most of what you need to on your phone within the next coming years.
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Speaker 2
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Speaker 2
Yeah, I agree with that. And, and I think it's also just to briefly return to the tax element of the shared rural network, where the number of masts that were envisaged to be built under that scheme was very significantly reduced, and the location of them was moved from remote areas to more populated areas. I do think. There's a big challenge around getting community and planning authority consent. And as I said, one of the frustrations we have about the tax programme was that the money was there to build the site, the sites, the willingness was there to build the sites, but we couldn't get permission to do that.
And that is a tough nut to crack. So I think we need to keep talking with those communities and keep that dialogue very much open to make the case for connectivity and to be to put ourselves in a position to to meet that need and to persuade these communities to take the infrastructure that's required to give them the connectivity they may want.
And that is a tough nut to crack. So I think we need to keep talking with those communities and keep that dialogue very much open to make the case for connectivity and to be to put ourselves in a position to to meet that need and to persuade these communities to take the infrastructure that's required to give them the connectivity they may want.
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Speaker 3
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Speaker 3
Yeah. So obviously filling the gaps. What's happened in the past is joint initiatives with government, which which we've as we've established S4, GE worked well. EAS worked well. SRN yes, it went a huge amount of the way. So there is that discussion. I do so for these remaining areas which are particularly remote satellite I think will be seen as the solution just because building.
I think some mass building out in these areas, it costs about £1 million. And if it's only 1 or 2 people using them a year, is that is that sensible? If you have got enough from satellite on energy, energy relief, yes. I think if government came to us and wanted to have a sensible discussion about coverage obligations for support in other areas, that's absolutely something that can happen. I know in other countries with spectrum fees, they sometimes, instead of instead of us paying fees on the spectrum, they will put in coverage obligations.
So that is a that seems sensible. That seems another way for the government to achieve its objectives in a way which incentivises our business in a sensible way.
I think some mass building out in these areas, it costs about £1 million. And if it's only 1 or 2 people using them a year, is that is that sensible? If you have got enough from satellite on energy, energy relief, yes. I think if government came to us and wanted to have a sensible discussion about coverage obligations for support in other areas, that's absolutely something that can happen. I know in other countries with spectrum fees, they sometimes, instead of instead of us paying fees on the spectrum, they will put in coverage obligations.
So that is a that seems sensible. That seems another way for the government to achieve its objectives in a way which incentivises our business in a sensible way.
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Speaker 1
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Speaker 1
I think with 100% coverage, the curve gets exponential in terms of the number of sites you would need. So, you know, we're at 1991 geo coverage. Can we push that terrestrially to 92, 93, 94? Probably. If we can get the right frameworks in place and the right enablers to deliver. I'm not aware of any large country that has 100% coverage because, as I say, it gets this exponential point where you are literally building tens of sites to serve areas.
So I think 100% is a realistic pushing terrestrial as far as we can is a good thing to do from a sovereignty point of view, from a resilience point of view. And then as others have said, you will need to probably think about other technologies for the final part.
So I think 100% is a realistic pushing terrestrial as far as we can is a good thing to do from a sovereignty point of view, from a resilience point of view. And then as others have said, you will need to probably think about other technologies for the final part.
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Speaker 2
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Speaker 2
Yeah. But you raise an interesting point about coverage obligations. When O2 got its 4G spectrum many years ago now, that came with coverage obligation to reach 98% of the population. And I think that did help pull not just us, of course, but the whole industry. You know, we levelled up and and that they could have a coverage obligations, could have a future role to play. Possibly. Yeah. Thank you.
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Patricia Ferguson
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Patricia Ferguson
Can I just ask you planning has been mentioned a number of times, and I'm thinking of a case actually in my own constituency, which is very, very urban. But the there's a very controversial proposal sitting at the moment, and it doesn't feel as though operators have thought very carefully about where this particular installation should be located. I just wonder generally and not specific to my constituency, how much work goes into deciding exactly where your infrastructure will be located, because this one in particular.
But I've seen others in other parts of the country that are more rural, that have seemed to me to be odd, put it that way or not, the best fit for a local community. And it seems to me you would perhaps get a little bit further if you were to take communities with you, rather than perhaps just deciding that I don't know what your criteria is. Is it commercial? Is it a more broadly based consideration? Yeah,
But I've seen others in other parts of the country that are more rural, that have seemed to me to be odd, put it that way or not, the best fit for a local community. And it seems to me you would perhaps get a little bit further if you were to take communities with you, rather than perhaps just deciding that I don't know what your criteria is. Is it commercial? Is it a more broadly based consideration? Yeah,
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Speaker 4
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Speaker 4
yeah, yeah. Look, I think it's a really fair sort of question to ask. I can't comment , obviously, on the on the specific case. We do spend a lot of time on this and we try and think really responsibly about it. I'm sure we get some wrong. And it's always a combination of sort of the community factors, the engineering, the costs, the sort of network design. You know, it's a complicated set of factors you can imagine.
There's a sort of various problems with it. From our point of view, principally it's a kind of time and money sort of so. So we put lots of time into the kind of planning and planning of the planning application, if you like, and then it's a sort of 6 to 9 month process to get an answer in aggregate. I think something like half or two thirds of them get sort of rejected. We then appeal most of the appeals that we win, but the amount of time that's been sort of wasted in that process and money spent sort of slowing the whole thing down.
And I don't know, I don't know what the Norwegian planning system is like, but other countries definitely do this better. Some of it's actually just about there being more planning officers available to do the work in local authorities. And look, I'm conscious lots of these things, as with energy costs, as with licensing, there's a sort of wider fiscal kind of, you know, set of constraints at work here, but it would make our lives a lot easier if there were more resources available to make this kind of process quicker.
Absolutely. In some cases, we'd probably get it wrong ourselves. There are some specific adjustments that could be made that would really help. I mean, one, one of them is to sort of slightly expand this category of what is permitted development and where we can put things without having to go through that process. Clearly, that would then put an obligation on us to be responsible about where we do that. And the other is the way that the process works when we want when the landlord of a of a building where we have a site, usually something on a, on a roof and wants to remove our, our apparatus or do something different with their building, whatever it's called, a notice to quit.
And we only get 18 months in that situation to find an alternative site. And that's actually not very long given all the factors. I just sort of laid out to find an alternative and go through the planning process and get it up and running and get the power and all those sorts of things. So we've been arguing quite strenuously for a while that we think a doubling of that sort of length of time would make a massive difference to avoiding the problem that you get in urban environments, where suddenly the signal will disappear for a while, while we're kind of messing about trying to fix that problem.
So there are a number of and again, it's quite boring and technical sort of business of government. But if if all of these levers were to be pulled, it would make a big difference. When you look at the total picture.
There's a sort of various problems with it. From our point of view, principally it's a kind of time and money sort of so. So we put lots of time into the kind of planning and planning of the planning application, if you like, and then it's a sort of 6 to 9 month process to get an answer in aggregate. I think something like half or two thirds of them get sort of rejected. We then appeal most of the appeals that we win, but the amount of time that's been sort of wasted in that process and money spent sort of slowing the whole thing down.
And I don't know, I don't know what the Norwegian planning system is like, but other countries definitely do this better. Some of it's actually just about there being more planning officers available to do the work in local authorities. And look, I'm conscious lots of these things, as with energy costs, as with licensing, there's a sort of wider fiscal kind of, you know, set of constraints at work here, but it would make our lives a lot easier if there were more resources available to make this kind of process quicker.
Absolutely. In some cases, we'd probably get it wrong ourselves. There are some specific adjustments that could be made that would really help. I mean, one, one of them is to sort of slightly expand this category of what is permitted development and where we can put things without having to go through that process. Clearly, that would then put an obligation on us to be responsible about where we do that. And the other is the way that the process works when we want when the landlord of a of a building where we have a site, usually something on a, on a roof and wants to remove our, our apparatus or do something different with their building, whatever it's called, a notice to quit.
And we only get 18 months in that situation to find an alternative site. And that's actually not very long given all the factors. I just sort of laid out to find an alternative and go through the planning process and get it up and running and get the power and all those sorts of things. So we've been arguing quite strenuously for a while that we think a doubling of that sort of length of time would make a massive difference to avoiding the problem that you get in urban environments, where suddenly the signal will disappear for a while, while we're kind of messing about trying to fix that problem.
So there are a number of and again, it's quite boring and technical sort of business of government. But if if all of these levers were to be pulled, it would make a big difference. When you look at the total picture.
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10:31
Angus MacDonald
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Angus MacDonald
Sorry, I just want to challenge you about this community and planning because that's what I do. I go around the communities and I know them really well. I guarantee a community that has not got mobile phone would be desperate for it. They would be desperate. So they are not against it. They may be a site for some reason. If you had like a local community liaison officer who was from the area, who sat down at the community council and discussed where it best go, I promise you that would get rushed through.
So I'm afraid to say it's the way it's, in my opinion, the way it's managed rather than the reality.
So I'm afraid to say it's the way it's, in my opinion, the way it's managed rather than the reality.
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Speaker 2
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Speaker 2
Yeah, I'm happy to respond to that. Thank you. I don't think that observation would be wholly aligned with with our experience on the programme, as I said. But what I and what I would say is that in terms of where proposed sites are located, that is, they are decided upon after extensive planning and analysis by our network engineering teams. And what drives that is, which sites will best suit and meet customer need.
You do raise an interesting point though, about community consultation and pre planning application consultation that we do with local authorities. We do have to make that as as good as we can, as effective as we can to ensure that as far as we can, we are acknowledging and addressing all those concerns, and that's something for us to take away and learn from. Absolutely.
You do raise an interesting point though, about community consultation and pre planning application consultation that we do with local authorities. We do have to make that as as good as we can, as effective as we can to ensure that as far as we can, we are acknowledging and addressing all those concerns, and that's something for us to take away and learn from. Absolutely.
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Dave Doogan
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Dave Doogan
Yeah. And just I'm quite surprised to hear the. Mr. Towers, to hear the notice to quit scenario that you have to deal with. Is this on specific sites or is this on buildings or is it on land or, or, or how does it how does it work? And in the context of the a CNI, is that your ambition that this latitude that landlords have would be very much tightened up?
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Speaker 1
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Speaker 1
So it's in London in particular as a site provider, it's becoming an extremely challenging environment because you can see the development going on. And there'll be parts of Edinburgh and Glasgow experiencing similar activity. I think as Alex talks about a longer period of time to deal with, it is absolutely critical because now we've got sites that go off air and, you know, literally lose the signal. I do think something about a a right to go back, you know, once the development has finished, we do see that in other countries where you have a right to then be reinstated on the roof would be helpful and be accommodated within that development kind of path.
You know, we do have managed to achieve that quite often with some developers. I think the sheer volume of development going on at the moment is resulting in real challenges here in London, but also in other environments. Unlike other critical utilities, we don't have that right to go back. If it was a gas main you were moving or an electricity cable, it would have to be reinstated. We don't benefit from that. And while that remains the case, we do need that that longer time period to deal with the issue and not not impact end users.
You know, we do have managed to achieve that quite often with some developers. I think the sheer volume of development going on at the moment is resulting in real challenges here in London, but also in other environments. Unlike other critical utilities, we don't have that right to go back. If it was a gas main you were moving or an electricity cable, it would have to be reinstated. We don't benefit from that. And while that remains the case, we do need that that longer time period to deal with the issue and not not impact end users.
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Speaker 4
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Speaker 4
I think there is a broader point there about yeah, exactly. Telecoms now is much, much more similar as an essential service to some of the other things that Jonathan's talking about. I mean, in a sort of parallel example, Openreach are not able to go in automatically and upgrade people's connections from a
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Speaker 1
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Speaker 1
Are not able to go in automatically and upgrade people's connections from a sort of old fashioned copper to a fiber connection in the way that other utilities have automatic rights of access in order to fix problems and upgrade things. And that's leaving kind of a million households for their broadband. connection with something.
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Douglas Lumsden
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Douglas Lumsden
ago. Next question is from Douglas Lumsden. Thank you chair. We've heard already this morning about 90% coverage. But as a consumer, unless I have three different SIM cards, I'm not going to have 90% coverage. So I guess it's back to the point. Should there be more sharing of infrastructure, especially in rural areas? And maybe, Jonathan, if I'll ask you, first of all, do you think that should be.
mandatory in some rural areas that we actually share, or .
mandatory in some rural areas that we actually share, or .
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Speaker 2
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Speaker 2
Operators have to share their infrastructure? I think as we about sharing is already very high in the UK, so there's no restriction on sharing. In fact, the vast majority of sites in Scotland and across the UK are owned by companies that want more sharing. Our commercial model is based on operators sharing more. Mandating is challenging. As Simon's alluded to, each network is planned. individually and therefore needs to take into account where other sites and other items are.
So I think if we move to a mandated world, it would be tricky from a network planning kind of point of view. But what I would say is 70% of sites have more than one operator on them already. And the companies that own them like ours are . Business model is based on attracting more sharers onto our site. There's no no restriction from our point of view. The thing we do need when more people come on is to be able to upgrade their infrastructure.
So rather than building a new site which may have a visual impact to communities, if we can upgrade what we've got a little bit stronger, a little bit higher than that can have a real impact. But I think that's that's the key here. It's about recognising there is a model that's working of sharing. It's a very open environment in the UK. And then we have to respect that. Operators need to plan their networks.
And . In some
So I think if we move to a mandated world, it would be tricky from a network planning kind of point of view. But what I would say is 70% of sites have more than one operator on them already. And the companies that own them like ours are . Business model is based on attracting more sharers onto our site. There's no no restriction from our point of view. The thing we do need when more people come on is to be able to upgrade their infrastructure.
So rather than building a new site which may have a visual impact to communities, if we can upgrade what we've got a little bit stronger, a little bit higher than that can have a real impact. But I think that's that's the key here. It's about recognising there is a model that's working of sharing. It's a very open environment in the UK. And then we have to respect that. Operators need to plan their networks.
And . In some
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Speaker 3
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Speaker 3
deliver in that area the coverage and it and it should then that's where a discussion is to be had with government on how we can do that. In terms of. Yeah, but the mandatory aspect of it does need to be carefully done. Because talking about incentives, how do you incentivize us to build into areas if when we build into somewhere, we've then got to let every other operator on it, that would weaken the incentive.
So but if that's not means we're not then building in an area which we absolutely should do, then that's where we need to that that's a market failure. And that's where we need to look at neutral host operators and what can be done. And certainly those discussions are always ongoing with government. Government will talk to us about a particular area. Why is this not got coverage. X, y, z. I think if it then transpires that it really is just deeply.
uneconomical for a single operator to do it. Hence the shared rural network is . Born
So but if that's not means we're not then building in an area which we absolutely should do, then that's where we need to that that's a market failure. And that's where we need to look at neutral host operators and what can be done. And certainly those discussions are always ongoing with government. Government will talk to us about a particular area. Why is this not got coverage. X, y, z. I think if it then transpires that it really is just deeply.
uneconomical for a single operator to do it. Hence the shared rural network is . Born
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Speaker 3
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Speaker 3
sure you work together to provide a service for our rural communities. Yeah. I suppose the coverage you start to get back to that. Are we are we serving the. communities we need to or chasing a coverage goal? So how are we always making sure we're we're doing what the country needs, what local communities need? We always want to be laser focused on that. And again, I'd return to it. Satellite is going to help a lot here.
It is going to do that. Some of some of those areas that are just for a terrestrial mass, deeply uneconomical. So so and final point is, well, we are investing a huge amount in Scotland as part of our merger. So a lot of areas that do not yet have coverage will be going to 5G standalone as well. So a lot is being done. And I guess what I'd revert to is, and I know what DCMs is looking at, is when all of our build plans for this cycle are done, what is left and then what is needed to fill them, whatever it may be, whatever solution.
It is going to do that. Some of some of those areas that are just for a terrestrial mass, deeply uneconomical. So so and final point is, well, we are investing a huge amount in Scotland as part of our merger. So a lot of areas that do not yet have coverage will be going to 5G standalone as well. So a lot is being done. And I guess what I'd revert to is, and I know what DCMs is looking at, is when all of our build plans for this cycle are done, what is left and then what is needed to fill them, whatever it may be, whatever solution.
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Lillian Jones
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Lillian Jones
Thank you chair. Yes. Questions from Lillian Jones. Thanks very much to each of the panel. And I know that you've touched on it before, but just just to ask the question again, your key asks of government in terms of the mobile market review, specific policy, regulatory or investment measures that would improve the business case for long term investment in mobile connectivity. So just .
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Speaker 1
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Speaker 1
If you could just make it clear to the camera, okay, so we would say, and we as I say, we've given them 40 suggestions to the government through that review process. But big headings would be planning reform. Approach to areas of market failure. Transport in particular. But also any of these sort of points we've been on about very, very rural places that need public.
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Speaker 1
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Speaker 1
to do something about the way that the spectrum is licensed, taxed effectively, reform of the net neutrality or capacity for us to do provide different. Services. With our 5G networks. Require slight adjustment to what they call a net neutrality rules basically means for us to get revenue from big over the top providers to increase the amount of investment we put into services for everyone else, a reform of energy. costs to ease the sort of pressure of increasing burden on us as providers of national.
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Speaker 3
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Speaker 3
together. Those would be the highlights. Yeah. Mobile market review. We, we, we see broadly the same planning sits outside of it. But also England is consulting on planning reforms at the moment, which will go some way to helping us including the notice to quit issue. I will say Scotland's always been pretty good at planning. I think they are forward thinking and they do work with us well, but we do want them to go a little bit further on permitted development rights where it's sensible.
And again, it's not about building new masts where people don't want them. This is about extending the height and the width in places where it makes sense. That will ease a lot of the planning burden and allow us to deploy quicker cost base. Anything government can do to support our cost base energy is the big one. As I said, hundreds and hundreds of millions, and it is compounding every year. And we do think and a lot of energy costs are put on businesses to incentivize them to use the network at different times.
We can't do that. We need to run all the time. So our argument to government is that actually a lot of these. non-commodity costs just don't apply to us, and they shouldn't. You should apply them as you have done to other sectors in similar with similar structures. And the third one is about net neutrality. And I know it sounds a bit it does sound very technical, but it is doing it's reforming old rules in a sensible way.
We've got a very smart 5G standalone network now coming into play, which we've spent a lot of money on. You can do a lot of very cool things with it. So what we want to do is to be able to do that, to offer specific products to people that helps us monetise the network to allow us, and if we can monetize it, that then allows us to invest more. So .
And again, it's not about building new masts where people don't want them. This is about extending the height and the width in places where it makes sense. That will ease a lot of the planning burden and allow us to deploy quicker cost base. Anything government can do to support our cost base energy is the big one. As I said, hundreds and hundreds of millions, and it is compounding every year. And we do think and a lot of energy costs are put on businesses to incentivize them to use the network at different times.
We can't do that. We need to run all the time. So our argument to government is that actually a lot of these. non-commodity costs just don't apply to us, and they shouldn't. You should apply them as you have done to other sectors in similar with similar structures. And the third one is about net neutrality. And I know it sounds a bit it does sound very technical, but it is doing it's reforming old rules in a sensible way.
We've got a very smart 5G standalone network now coming into play, which we've spent a lot of money on. You can do a lot of very cool things with it. So what we want to do is to be able to do that, to offer specific products to people that helps us monetise the network to allow us, and if we can monetize it, that then allows us to invest more. So .
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Speaker 2
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Speaker 2
there would be the three things we'd pick out from the review and from an infrastructure kind of perspective, I think it starts with what quality of networks do we want to deliver where. And then building a set of policy interventions around that. So probably split between the enablers that others have spoken around access to power, better planning rules to upgrade things, and then also looking at where government is planning to do things already. And Alex mentioned the rail network, for example, that will undergo a massive upgrade in a shift from its.
operational network that's going to be built. And there'll be a lot of new sites built for that. So where government's already investing in.
operational network that's going to be built. And there'll be a lot of new sites built for that. So where government's already investing in.
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Speaker 2
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Speaker 2
when you're building power lines, you're putting gas mains, when you're putting roads through things, it's looking it's assessing the the impact of that in the same way as I say in Scotland, we have renewed. 99% of all our leases consensually with landlords. What does lease renewal mean? It means that you can upgrade the infrastructure, you can put additional shares onto it, and it means that communities can benefit from new services. We're not having to continually kind of negotiate around that.
I think the other so so that that program that we've run of lease renewal has meant that we can upgrade. 750 services , basically, because we've got the rights now to do what we we need to do. So I think it's been a really big.
I think the other so so that that program that we've run of lease renewal has meant that we can upgrade. 750 services , basically, because we've got the rights now to do what we we need to do. So I think it's been a really big.
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Speaker 3
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Speaker 3
faster and more cost effective. Just very quickly, one correction, the record, I said 70% 4G coverage in Scotland is is close to 80%. So I do apologize on the code. Yes. Please don't unpick the code. I think we we did work hard to get there. It's obviously it is a. complicated balancing act on rights of. landowners versus rollout of coverage. I think what's incumbent on us is to always use the code as responsibly as we can.
And that's something that we always try and do. Again, a bit like planning 20. We've got over 30,000 sites, so. sometimes things might not be done. As to the absolute highest standard, we need to make sure that that it goes towards that case. But the code as it stands we think is has been very good news.
And that's something that we always try and do. Again, a bit like planning 20. We've got over 30,000 sites, so. sometimes things might not be done. As to the absolute highest standard, we need to make sure that that it goes towards that case. But the code as it stands we think is has been very good news.
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Speaker 2
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Speaker 2
And the similar stats available at kind of an industry level about how few court cases have resulted in that. As George says, we strive to do the best we can. We do really a large number of leases, and part of our approach is we ensure that we fund landowners to be professionally. represented and independently represented, so they get a fair deal in this in this process. But actually, if you look at the volume of court cases, it's very, very low.
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Speaker 3
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Speaker 3
it. So it's been largely achieved consensually. Anything else to add? Or I'll just say, when you do get concerns about planning or code issue and you know who the operator is, please tell us and we will work with you. We get a lot of casework already, but we're always open to more. And it does help. And it does close that loop because we can then look at what's happened. If something has happened and hasn't followed the process, we can make sure it does.
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Patricia Ferguson
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Patricia Ferguson
Number . Sorry. That's. That's panel two. Yes. Sorry. Sorry. You're quite right to correct me. That's actually our last question to this panel. So thank you all very much. That's been very, very interesting. Mr. Robinson, I think we'll be getting you frequent flyer miles for the. But it's very helpful to hear your experience and your.
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Angus MacDonald
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Angus MacDonald
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Speaker 9
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Speaker 9
I believe that the whole policy behind land mass was built on the premise that the previous approach, which was trying to address population wasn't working fast enough. So, you know, the whole principle of, of thinking, okay, let's do land mass is, is completely understandable. I think, however, the approach was probably done from a desktop situation, not taking into proper account what the land mass of Scotland actually looks like. And, you know, I think there's some brilliant quotes around the place of the penny dropping about what the landmass actually looks like.
I think what happened then was it became a numbers exercise. It was. essentially the approach to land mass was still designed to be addressing population. But I think as things went on, it just moved across into just getting masts up to cover as much percentage of the land as possible. Job done. Then the detailed surveys and things with the review showed that actually maybe this wasn't the best use of money.
And that was obviously all coupled with a lot of pressure from.
I think what happened then was it became a numbers exercise. It was. essentially the approach to land mass was still designed to be addressing population. But I think as things went on, it just moved across into just getting masts up to cover as much percentage of the land as possible. Job done. Then the detailed surveys and things with the review showed that actually maybe this wasn't the best use of money.
And that was obviously all coupled with a lot of pressure from.
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Speaker 9
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Speaker 9
Which essentially was I mean, I suppose the very much the case that that organisations are usually at loggerheads, which with each other coming together over a point, is quite a good signal that something is wrong here. And I think the message got through. And that is why the the whole approach. pivoted and moved. towards trying to focus things much more on population need public sector, public. services and transport and such like.
But I think that. Moving on to your point about the, you know, how can site selection be improved? Covering land does not. equal addressing connectivity needs. And I think that, as I said before, the original purpose had been lost. And I think if you take Mr. Duggan's.
But I think that. Moving on to your point about the, you know, how can site selection be improved? Covering land does not. equal addressing connectivity needs. And I think that, as I said before, the original purpose had been lost. And I think if you take Mr. Duggan's.
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Speaker 9
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Speaker 9
village of Stanley, as a very clear example of this, that that village is in a partial not spot, even though actually thousands of people do not have. connectivity at all. They weren't on the programme, they were not on the NSS programme. They are still without connectivity. And Stanley is not an inaccessible place. You know, it's a hop, skip and a jump from Perth. It is it is relatively.
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Speaker 9
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Speaker 9
You know, there are definitely improvements that can be made. I think the question should really be where, not where should we build a mast? It should be how do we connect this community? Because if the the mast approach isn't working, something else has got to be done. And I think Mr. Robertson in the earlier.
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Speaker 9
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Speaker 9
I think the simple answer is no. You know, we do support the underlying objective of it, which was to improve connectivity. But essentially the operator powers have and rights have. expanded so much. At the same time, the. compensation for. hosting has gone down significantly. And it basically the seesaw has tipped so far that it is .
It is.
It is.
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Patricia Ferguson
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Patricia Ferguson
There needs to be engineers coming on site and coming through a farming operation, for example, and there isn't really much, if any, forewarning of when that's going to happen. And these these are businesses trying to get on with their day to day work so that the kind of the. management issues and. disruption is still there with much lower compensation. So, yes, our members certainly feel that it's it's tipped .
slightly too much in favour of the operator. So landowners point of view, how does the Wayleave system actually . Operate then
slightly too much in favour of the operator. So landowners point of view, how does the Wayleave system actually . Operate then
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Speaker 9
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Speaker 9
go for this one. Okay. I think that probably the easiest way to describe it is when a landowner is is approached. It is not a simple case of yes, no. They've got to. consider how the proposal affects the existing farming or forestry, whatever rural business it is that's going on on that land. They've also got to do a bit of crystal ball gazing because they've got to think, right, okay, if we do this, what does it mean for anything we might want to do in the future? So for.
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Speaker 9
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Speaker 9
And careful assessment takes time and usually quite a lot of professional advice so that solicitors, land agents and basically anyone who has got more experience than typically someone who is more used to dealing with sheep. It is it is a is a considerable. undertaking to take on a wayleave with limited knowledge. And it's I think it's one of those things that someone might only have to deal with this once in their life.
They might never have had experience with it before, and they're under a lot of pressure to, to basically provide answers fast. I think the challenges that operators often approach the process as a binary exercise. They need their. infrastructure in a particular. location and they just want consent. They just want to get on with it. Landowners have got this long term. connection to the land, and they've got to consider not just that piece of.
They might never have had experience with it before, and they're under a lot of pressure to, to basically provide answers fast. I think the challenges that operators often approach the process as a binary exercise. They need their. infrastructure in a particular. location and they just want consent. They just want to get on with it. Landowners have got this long term. connection to the land, and they've got to consider not just that piece of.
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Patricia Ferguson
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Patricia Ferguson
property in perpetuity. So if we look at the code, what provisions of the code cause greatest. concerns to. I suppose it is just that significant reduction in rent means that. Now, you know, so I was speaking to a member earlier this week, and he was explaining that when his maths went up at the beginning of the.
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Patricia Ferguson
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Patricia Ferguson
was actively helping that planning process because he knew that it was in the best interests of the community. Also his business, it was bringing in diversification of his income, quite frankly, and he wanted it on his farm, and he was very happy to do so. So he was helping the. operator in the planning process. And through doing that, I think it was much smoother than perhaps other cases have been. But now, because of yeah, now it is not as.
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Patricia Ferguson
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Patricia Ferguson
But also it is the mass is shared with other with other operators, which is fine, but that means there are more businesses now needing access to that site. So there's a more frequency of disruption. And I mean, he was, he was telling me about how they have a cable on the ground, basically, and it was called self burying. And what that means is the grass was to grow over it. But that's not a safe or responsible way of actually putting that cable down.
So he then has to adapt all of his management. practices for this particular cable, even though that was not how I think it was originally planned. But so I suppose again, just going back to the original point is the the massive reduction in rents means that the. compensation for that hassle is greatly reduced. And though in rural Scotland, of course, we really need these areas to be covered better. We also need to be aware of the fact that these are.
businesses and these are still farmers in these rural communities trying to operate successfully. So it's just about getting that. balance in a more sustainable manner so that hopefully going.
So he then has to adapt all of his management. practices for this particular cable, even though that was not how I think it was originally planned. But so I suppose again, just going back to the original point is the the massive reduction in rents means that the. compensation for that hassle is greatly reduced. And though in rural Scotland, of course, we really need these areas to be covered better. We also need to be aware of the fact that these are.
businesses and these are still farmers in these rural communities trying to operate successfully. So it's just about getting that. balance in a more sustainable manner so that hopefully going.
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Speaker 9
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Speaker 9
So they sort of all kind of build on each other. And I think that this this. Reduction in rent versus the greater. impact is. possibly the best. illustration of how the. imbalance looks. I think that the there was talk in the previous session about increased power. And I think this is actually quite a good example. When you have a mast, which is up in the hills somewhere, typically it is actually generate.
The power is generated by diesel.
The power is generated by diesel.
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Speaker 9
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Speaker 9
Which you can. Your climate thoughts on that and itself. But when you have a mask that is needing more power, that means more journeys to refill the diesel. And I've seen some, frankly appalling images of scarred. peatlands because of this repeated journey with ATVs to, to basically. refill the fuel. It's obviously not in every.
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Speaker 9
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Speaker 9
It's not necessarily just about the rent, but for example, it could be about an access agreement. And there was one case in Argyll where a farmer was approached for a new agreement. Under the code rights, the operators can update the agreement. The impact of that obviously is, apart from anything else, a reduced rent. The pressure that was put on this couple was really very. intimidating and quite aggressive.
The before they could even actually employ an agent, the legal papers had been served on them and such like. And so the agent then had quite a lot of work having to do to. They essentially had to assist the. process in order to sort of, you know, catch up the pressure that is put on to some landowners. And particularly there seems to be an.
The before they could even actually employ an agent, the legal papers had been served on them and such like. And so the agent then had quite a lot of work having to do to. They essentially had to assist the. process in order to sort of, you know, catch up the pressure that is put on to some landowners. And particularly there seems to be an.
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Speaker 9
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Speaker 9
Opportunist approach by some that basically tap into them not really knowing the process. And in that case, they were wanting to change the access route. And the farmer did not want the access to shoot route change or wanted it changed in a slightly different way to how they had proposed it. And they were not prepared to negotiate. And this, you know, this is this is where my point about the wayleave. process is really important.
You know, the the operators and their agents have got to understand that that the farmers aren't. difficult for no reason. It's really important to understand why they're saying actually perhaps not that route and give them. time to actually go through that process. The other the operators were talking about the need for time when things are on, when the shoe's on the other foot, you know, when when equipment wants to be taken .
Down, they
You know, the the operators and their agents have got to understand that that the farmers aren't. difficult for no reason. It's really important to understand why they're saying actually perhaps not that route and give them. time to actually go through that process. The other the operators were talking about the need for time when things are on, when the shoe's on the other foot, you know, when when equipment wants to be taken .
Down, they
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Patricia Ferguson
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Patricia Ferguson
it is it a threat, not a reality? I think it's possibly becoming or likely to become more of a reality. I think the frustration is just quite high and kind of just on Anna's point there. If if particularly farmers and. crofters in challenging environments already where they're working, if they're raising an issue of concern about why they want an access route changed or why they want it over here instead of there, they're not doing it to be awkward.
They're doing it because it probably will directly impact how they work, and it probably will come out later in the in the period anyway. So yes, I think that the statistics that folk are trying to get out of it is. probably fairly accurate. And I think if this doesn't improve and if this this goodwill that we've kind of seen previously in how how this was.
They're doing it because it probably will directly impact how they work, and it probably will come out later in the in the period anyway. So yes, I think that the statistics that folk are trying to get out of it is. probably fairly accurate. And I think if this doesn't improve and if this this goodwill that we've kind of seen previously in how how this was.
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Angus MacDonald
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Angus MacDonald
way, it is likely that that will take place . And just. in short order. So the electronic communications code, does that. specify the the relationship, the financial relationship between the mobile operators and the . Landowners. Or is it it's got nothing to do if it doesn't cover the mathematics. That's entirely due to the mobile . Phone.
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Patricia Ferguson
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Patricia Ferguson
And if so, why? Yes. I mean, just from going around the houses for coming here today and speaking to members that are dealing with this. And I was a farmer up in Shetland. So there's a few masts up there and we've had issues last year. I think it is. There is just kind of what I've already talked about, just that frustration and that hassle level that is still there and the disruption to to farming operations.
And I think just that lack of willingness to try and engage. collaboratively early so that you can maybe see how we could avoid some of this coming further down the track. So, yes, I think it is .
And I think just that lack of willingness to try and engage. collaboratively early so that you can maybe see how we could avoid some of this coming further down the track. So, yes, I think it is .
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Speaker 9
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Speaker 9
Likely to. increase and rumble on. A lot of it sort of comes down to essentially behaviours of operators and agents. And I need to stress that this is not all of them. You know, it's a it doesn't. There are just inevitably. 1 or 2 bad eggs that basically make things very difficult. And yeah, bad news always travels a lot faster.
And so there is constantly going to be this what's in it for me? This is just so not worth it. And then when you're being faced with quite aggressive, it's quite often the first thing you know about a mast is you get a letter and it in that first letter, you see , they start shouting about code rights. And so they're already. threatening that if you don't let us do this, we're going to, you know, throw the book at you.
And that's obviously never going to be a great start to negotiation. So the, the, the yeah, I mean, I mean, that's just a sort of a common sense, bad, bad, bad start out of the blocks. But I think that as Lorna sort of touched on, it's like trying to get that early.
And so there is constantly going to be this what's in it for me? This is just so not worth it. And then when you're being faced with quite aggressive, it's quite often the first thing you know about a mast is you get a letter and it in that first letter, you see , they start shouting about code rights. And so they're already. threatening that if you don't let us do this, we're going to, you know, throw the book at you.
And that's obviously never going to be a great start to negotiation. So the, the, the yeah, I mean, I mean, that's just a sort of a common sense, bad, bad, bad start out of the blocks. But I think that as Lorna sort of touched on, it's like trying to get that early.
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Speaker 9
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Speaker 9
Little things like when planning consent was put in for the SRN masts. Community engagement essentially involves writing to the local community council. If there was one. Of course, local community councils were then expected to respond within a fortnight. Local community councils are quite rarely don't meet beyond once a quarter, let alone once a fortnight. And when you've got as many masts being put in as as the shared rural network initially proposed, some community councils were being faced with.
literally tens and tens of of planning applications. They didn't have the capacity amongst their volunteer group to to put together a comprehensive response, let alone straw poll, the actual people who might be benefiting or otherwise in an area. So community.
literally tens and tens of of planning applications. They didn't have the capacity amongst their volunteer group to to put together a comprehensive response, let alone straw poll, the actual people who might be benefiting or otherwise in an area. So community.
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Speaker 9
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Speaker 9
Early and being transparent. So when when the. landowner has a. question actually answering that. question and you know, if they don't know the answer, find out the answer. But a lot of what I've heard is that that. basically very junior people coming to site surveys and things like that and simply not having that information at their.
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Speaker 9
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Speaker 9
And that doesn't help the relations. And it builds a lack of trust because what are they hiding? They're probably not hiding anything. It's just that they haven't been briefed properly. But, you know, all of this would work a lot, a lot better to it. But also, I've pointed out before time giving, give, give the landowners time to get proper advice. Because if their advice. properly things are well, should move forward in a much cleaner way.
And also being fair in the terms. Because in any.
And also being fair in the terms. Because in any.
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Speaker 9
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Speaker 9
They've got to be matched by strong. accountability as well. And the there is no. method at the moment of. Complaining about poor behaviours by operators or their agents. There is scope that was set out in the Product Security and. Telecommunications Infrastructure Act 2022. Section 70 has not yet been implemented. That recognised the importance of operator . Conduct. But it's a chocolate teapot because it.
essentially set up a situation where the operators would be marking their own homework. So, you know, if if if the operators have a. problem with proper.
essentially set up a situation where the operators would be marking their own homework. So, you know, if if if the operators have a. problem with proper.
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Patricia Ferguson
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Patricia Ferguson
Connectivity a lot faster. Do you have anything to add? Yeah, I mean, I would just agree, and I think I think the panel before kind of touched on the appeals that they're going through and kind of the time it takes for them dealing with disputes and all that kind of thing, and the money invested that that takes up. And I just think a lot of those kind of issues that take up a lot of time and money could probably be resolved much earlier, much cheaper, much faster if there was a more balanced approach to it.
So actually, if there was that more balanced approach, I think rolling it out is. actually more likely to . Move
So actually, if there was that more balanced approach, I think rolling it out is. actually more likely to . Move
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Speaker 9
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Speaker 9
a mast on their land against their will? The there have been cases where it has gone all the way to tribunal. It's not necessarily gone all the way, but. But typically it will go all the way and then get withdrawn, because the thing is that, you know, more often than not, the tribunal cases relate to rents and other other facts, but. masts .
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Speaker 9
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Speaker 9
I think that the code needs to. recognise the increased. intensity of use. And you know, that increased intensity doesn't come without those impacts. And I think that, as I mentioned before, it's really. important that the. accountability factor is strengthened. It's got to be made appropriate for the powers and rights set out in that under the code. And that has got to cover oversight of.
operator conduct. It's got to include a proper.
operator conduct. It's got to include a proper.
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Patricia Ferguson
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Patricia Ferguson
And property rights. Do you want to add anything to that? Yeah, I would agree with that. I think that. complaints point is important. Just having that kind of oversight of how the operators are behaving or operating and giving the people that are dealing with them some kind of safety net, as it were, I think would really help. Yeah, no, but I would agree with what you just said.
Thank you both very much. That was very interesting. And we're very grateful to you for coming to the committee this morning. That . Concludes our
Thank you both very much. That was very interesting. And we're very grateful to you for coming to the committee this morning. That . Concludes our
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