Written evidence submitted by Mobile UK (DCG0017)

Select Committee for Science, Innovation And Technology:

Inquiry into the Government’s plans for a Digital Centre for Government

Evidence from Mobile UK and Mobile Infrastructure Forum

About Mobile UK

1.      Mobile UK is the trade association for the UK's Mobile Network Operators (MNO) – EE, Virgin Media O2, Three and Vodafone. Our goal is to realise the power of mobile to improve the lives of our customers and the prosperity of the UK.

About Mobile Infrastructure Forum (MIF)

2.      The Mobile Infrastructure Forum is comprised of four participant organisations Cellnex,          Cornerstone, MBNL and Wireless Infrastructure Group, who operate large scale portfolios of shared macro mobile infrastructure throughout the UK.

Summary

3.      Mobile UK and MIF welcomes the opportunity to provide evidence to the Committee for its Inquiry into the Government’s plans for a Digital Centre for Government, which we broadly support.

4.      Encouragingly, the UK is starting from a reasonably strong base, with good momentum. In the United Nations 2024 E-Government Survey, the UK is judged to be in seventh position globally, having risen four places over the previous year.

5.      However, the UK’s score is dragged down by the state of our digital infrastructure and ‘human capital’, which rates poorly when compared to other leading nations. Our submission therefore focuses on these aspects.

6.      The Digital Centre for Government will only be successful if it has the right human and physical infrastructure to support it and consideration of how to redress these shortcomings should therefore be a core element of the Committee’s Inquiry.

7.      Proactive intervention by Government will have a significant impact on redressing the deficiencies laid out in the UN report, including some specific measures:

8.      Regulatory resources, planning reform, and fiscal measures

• Further reforms to Permitted Development Rights in telecoms, to aid rollout
• Fully resourced planning departments and Building Safety Regulator, so as not to hold back network investment
• Full implementation of the Product Security and Telecoms Infrastructure (PSTI) Act to enable all site agreements to benefit from streamlined processes of the reformed Electronic Communications Code.
• Business Rates holidays for new 5G investment.

9.      Reduction in spectrum fees

• Enable mobile operators to reinvest their annual spectrum fees where the commercial   investment case is very challenging.

10.  Reform of Net Neutrality Regulations

• Enable operators to make the most of the 5G opportunity by reforming net Neutrality Regulations and thereby support the UK’s ambitions for AI and the development of innovative services for key sectors such as healthcare, energy management and connected vehicles.

11.  Human Capital – empower and invest in Digital Champions

• Centrally fund Local Government to appoint Digital Champions – a Chief Digital Officer, or someone with similar senior authority and accountability, to champion key aspects of digital policy within local authorities, including rollout of infrastructure.

Local Government will be a crucial delivery partner for the Digital Centre for Government and the upcoming re-organisation of Local Government presents a one-off opportunity to build human capital and to enable positive progress in the digitalisation of government services at a local level.

Introduction

12.  A good place for the Committee to start its Inquiry is to consider how the UK is faring on digital government, when compared to other nations.

13.  In the United Nations 2024 E-Government Survey “Denmark, Estonia, and Singapore emerged as the global frontrunners demonstrating outstanding digital infrastructure, human capital, and service provision - with the UK rising four places to 7th.”

14.  The UK would have risen higher, but was strongly marked down for its relatively poor performance for digital infrastructure and human capital, where the report had this to say:

“The United Kingdom retains its place among the top 10, ranked 7th with an EGDI score of 0.9535, marking a slight improvement from its 2022 ranking. The UK continues to excel in its online service provision, driven by initiatives such as GOV.UK, a unified government platform offering seamless access to various public services. Furthermore, its focus on cybersecurity, supported by laws like the Data Protection Act 2018 and the establishment of a secure digital identity framework, enhances the reliability and security of online interactions.

However, despite its achievements, the UK’s overall EGDI score reflects room for improvement, particularly in telecommunications infrastructure and human capital. While the UK has made strides in adopting AI and digital services, its EGDI score indicates the need for further investment in digital literacy and infrastructure, areas where countries like Denmark and Estonia lead by a considerable margin.”

Key UN Recommendations for the UK

“The report highlights a few areas where the UK could enhance its global standing. One critical recommendation is to bolster its investment in telecommunications infrastructure.

While the UK performs well in online services, its telecommunications index lags behind those of the leading nations. As broadband and 5G become even more integral to digital government services, the UK must prioritise improving access and speed, particularly in underserved rural areas.”

15.  Mobile UK/MIF agrees with this assessment and has been consistently making similar points to Government over an extended period, with a series of recommendations which will help to redress the infrastructure deficit (of which more below).

16.  Any programme for government digitalisation will only be successful if it goes hand in hand with a proactive policy for improving both infrastructure and ‘human capital’ (skills). Our response therefore primarily addresses, the Committee’s question “What infrastructure and regulation is required to make the government “more digital”?, specifically as it relates to mobile infrastructure.

The vital importance of proactive Government policy for digital infrastructure

17.  In recent years, the investment outlook for the mobile sector has been very challenging, as intense competition, regulatory costs and disaggregation of the mobile value chain by ‘big tech’ has eroded profitability.

18.  In spite of this, industry has kept investing £2-£3 billion each year over the last 25 years – around £60 billion in total, in the face of service revenues declining to two thirds of what they were 10 years ago, while traffic volumes are 20 times greater. Approximately £40 billion has also gone directly to Government in spectrum fees. Taken together, these factors significantly have impaired operators’ capacity for investment.

19.  While this is not just a UK phenomenon, but a trend seen in many other countries, the investment environment for mobile in the UK has been one of the most challenging, a fact that is clearly illustrated by our comparatively poor position in the international league tables for 5G.

Fig 1.

20.  Governments, though, have recognised the vital importance of having world class digital infrastructure, including mobile and the need for supportive policy, and indeed, the previous Government did make some important changes to support mobile network rollout. For example, some aspects of Permitted Development Rights for telecoms were reformed and the Electronic Communications Code – the legislation which enables telecommunications providers to rollout mobile and broadband networks. The main elements of the reform were to remove the large premium rents that had built up for accessing land for telecoms and to improve operators’ ability to share infrastructure and to upgrade their equipment without being subject to the arbitrary charges that had become a standard feature of the market.

21.  These vital reforms have enabled the operators to invest an additional £532 million in 4G rural coverage, taking 4G to 95% of the UK’s landmass and facilitated investment in 5G.

22.  Notwithstanding the commitments to network rollout arising from the Three/Vodafone merger, Government policy must continue to evolve and be supportive. This will help UK make up ground against Denmark, Singapore and other tech savvy nations and start to develop comparative advantage in some key technologies, such as artificial intelligence, for which world-class digital infrastructure will be necessary.

23.  Mobile UK, together with MIF, are lobbying for a series of measures that will drive network investment and, in so doing, underpin the Government’s ambitions for growth, digital inclusion and productivity improvement, including the digitalisation of Government services.

24.  Drive regulatory reform and remove barriers

• Planning reform: Move further and faster to update Permitted Development Rights in our sector. This would not only cut the burden on overstretched planning authorities but also enable operators to bring new network capacity into service more quickly, with a knock-on positive economic impact.
• Resources: Ensure planning authorities and the new Building Safety Regulator (‘BSR’) are not a pinch-point in the investment pipeline; they must all be properly resourced to deal with applications in a timely way, and thus avoid ‘shovel ready’ projects being unnecessarily held back (and this is already happening with the BSR);
• Tax: Grant Business Rate ‘holidays’ for new 5G mobile infrastructure; this is a tactic which has been used successfully for fixed fibre and should be used to encourage operators to roll out 5G while the rates easement is in place (and which will ultimately increase the tax base over time).

25.  Reduce in Annual Spectrum Licence Fees (ALFs) for productive network investment

26.  Enable mobile operators to reinvest their annual spectrum fees in places where better connectivity would greatly benefit the economy, but where the commercial investment case is very challenging (such as on the railways or in some rural areas). These spectrum fees are no longer necessary to promote efficient use and a reduction of £250 million, for example, could bring forward investment in hundreds of new 5G sites, enhancing coverage and capacity. Considering the high multiplier effect that mobile investment delivers to the economy, this would have a much greater and faster impact than the equivalent expenditure on physical infrastructure (such as 8 miles of motorway or 3/4 mile of HS2.)

27.  Reform Net Neutrality Regulations

28.  Repeal the prescriptive net neutrality regulations currently in force and replace them with legislation that protects the core principles (such as ensuring all internet customers can access all legal services) but does not constrain innovation, as the current regulations do. This is in line with the conclusions drawn from Ofcom’s recent review of the subject.

29.  If the operators are to make the most of the 5G opportunity, to support the UK’s ambitions for AI and to develop innovative services, for example, in healthcare, energy management, connected vehicles and internet-based entertainment, they need more regulatory scope than they currently have; they must not be unnecessarily prevented from investing in tailored services for different applications and customers.

30.  Fully implement the Product Security and Telecommunications Infrastructure Act (PSTI)

31.  It is over two years since the passing of the 2022 legislation, crucial elements of the legislation are yet to be implemented. This delay is holding back critical investment in our mobile infrastructure, including investment in 5G and 5G Stand Alone (5GSA).

32.  The Government aims to boost growth and investment, yet this delay is harming the UK economy. We lose direct investment in mobile infrastructure and miss out on the economic growth that improved mobile connectivity drives.

33.  Approximately 6,200 sites (c.20% of total – i.e. potentially serving c.15 million customers at any one time) remain in legislative limbo, as they cannot be renewed or upgraded using the more streamlined processes of the reformed Electronic Communications Code.

Digital Champions, Local Government and investment in human capital (skills)

34.  The United Nations assessment also marked the UK down ‘human capital’, and this is certainly a significant risk area for the Digital Centre for Government.

35.  In addition to the UK’s providers of digital/mobile infrastructure, Local Government will be a crucial delivery partner for the Digital Centre for Government.

36.  The upcoming re-organisation of Local Government presents a one-off opportunity to build the organizational architecture and the human capital to enable positive progress in the digitalization of government services at a local level.

37.  Mobile UK has been advocating for some time that Local Government be centrally funded to appoint Digital Champions – a Chief Digital Officer, or someone with similar senior authority and accountability, to champion key aspects of digital policy within local authorities, including infrastructure rollout.

38.  As local government is re-organised, it must become a standard that digital matters fall within the remit of the new mayoral institutions and Strategic Authorities and that the Digital Champion be responsible for partnering with the Digital Centre for Government to deliver improvements at a local level. This will be vital for its ultimate success and for benefiting the widest number of citizens.

39.  Mobile UK's and MIF’s members – the UK's mobile network operators and major tower operators - have been in the frontline of deploying mobile infrastructure for many years and have first-hand experience that those local authorities which operate with a senior Digital Champion have benefited considerably from putting some focus on the adoption of digital services and facilitating digital rollout.

40.  In recent months, we have surveyed a number of local authorities who have digital champions in place. We have included as an appendix the case study of Wolverhampton City Council. We are also referencing a report published by the Digital Connectivity Forum in 2023 which recommended the appointment of digital champions, alongside our own report Building Mobile Britain: The Case for Digital Champions.

41.  Retrospective surveys, though, are only part of the story. Looking forward, making the most of improving and emerging digital opportunities will be the most effective way - possibly the only way - for the Government to deliver on its five missions and for local governments to be able to deliver on their heavy responsibilities. This will require powerful senior leadership and investment in the relevant organisations and skills.

Appendix: Case Study: Digital Champion – Wolverhampton City Council

42.  Our Council recognised the benefits that futureproofed digital infrastructure could bring at an early stage and took a proactive approach to supporting its rollout which included identifying in 2019, a senior level Digital Champion (Executive Director City Economy), Digital Coordinator (Head of City Economy) and responsible Cabinet Member for Digital City. We produced a Wolverhampton Digital Infrastructure Strategy in 2020 outlining our approach to supporting the rollout of futureproofed digital infrastructure. In response to the significant progress made in this area, we developed and adopted a Wolverhampton Digital Strategy in 2022.

43.  Supporting the rollout of full fibre broadband: we secured Local Full Fibre Network wave 2 funding connecting 170 public sector premises to full fibre which removed the barriers to City Fibre rolling out commercially in Wolverhampton. This has since led to both Openreach and Virgin upgrading their infrastructure to full fibre in Wolverhampton. We also adopted a block wayleave approach to support the rollout in social housing and multi-dwelling units based on Southwark’s approach and encouraged a dig once policy, planning toolkit and inclusion of wording in housing contracts to ensure full fibre forms part of the build.

44.  Supporting the rollout of 5G connectivity: we worked closely with WM5G, who supported us to understand telecoms and in particular the Electronic Communication Code, to put in place processes, standardised agreements, adopt code compliant consideration and compensation payments and encouraging pre-engagement discussions with Planning. We have made available our assets to support the rollout, including rooftops and greenfield sites and also streetlights to support the rollout of small cells including introducing a toolkit and license agreement.

45.  Wolverhampton’s full fibre coverage increasing from less than 2% in 2020 to 84% in October 2024 (Think Broadband). Wolverhampton’s proactive approach has taken us from the lowest coverage in the WMCA area to the 2nd highest. Wolverhampton was named a rising star in early 2023 due to the increase in full fibre coverage.

46.  5G coverage: Wolverhampton’s 5G coverage is 100% at least 1 operator and 63% all operators (Connected Nations Interactive Report high confidence). This should be treated with caution as we are aware that there remains areas within the city that have poor connectivity and capacity therefore there remains gaps we want to fill. Wolverhampton has been particularly proactive, working with WM5G, in supporting the rollout and has the highest proportion for all operators in the WMCA area.

03 March 2025