Ofcom slams operators over 3G coverage on roads, allows early contract exit

UK telecoms regulator Ofcom has come down hard on the market's mobile network operators, first saying they should allow users to exit their mobile contracts without penalty if the monthly tariff increases and then announcing plans to review 3G coverage after its latest figures show shockingly low levels of coverage for 3G data services on Britain's roads.

Ofcom said its decision on early contract exits was taken after a consultation into the issue. New guidance on how to interpret and apply current telecoms sector rules in relation to price increases during fixed-term contracts will come into effect in three months, Ofcom said.

Under the current rules, operators are required to give customers a minimum of one month's notice of any change to their contractual terms that is likely to be of "material detriment" and customers must be able to withdraw from their contract penalty-free following such notice.

"Ofcom is today making clear that consumers entering into fixed-term telecoms contracts must get a fairer deal," Claudio Pollack, Ofcom's consumer group director, said in a statement. "We think the sector rules were operating unfairly in the provider's favour, with consumers having little choice but to accept price increases or pay to exit their contract."

Once it comes into effect, the new guidance will apply to any new landline, broadband and mobile contracts, including bundled contracts where applicable. "We're making it clear that any increase to the monthly subscription price should trigger a consumer's right to leave their contract--without penalty," added Pollack.

Following the announcement on contracts terms, Ofcom also said it would be reviewing 3G network coverage across the UK after figures indicated that just 35 per cent of the length of the UK's A and B roads are served by all four 3G networks, and 9 per cent has no 3G coverage at all, affecting the ability to use data services while travelling for many users.

Ofcom said this shortfall should in part be addressed by the rollout of LTE networks, but it plans to carry out further analysis in the coming year to examine whether regulatory or government intervention may also be required to achieve wider mobile coverage on roads. It also plans to examine mobile coverage on major rail routes over the coming year.

"Superfast broadband is rolling out fast across the country, and 4G mobile will reach at least 98% of the population," Ofcom CEO Ed Richards said in a statement. "This is really good news but there remain considerable challenges, not least in hard-to-reach areas for mobile and home internet services."

EE, Vodafone UK and Telefónica's O2 UK all now offer LTE services and 3 UK plans to launch its LTE service in December.

The UK's Countryside Alliance told the Daily Telegraph that Ofcom's figures were "shocking" and demonstrate that rural communities were being "left behind in the rollout of mobile technology""

"Good connectivity is important for rural communities and those who rely on the road network to conduct their business," Sarah Lee, the Countryside Alliance's head of policy, told the Telegraph. "These figures further demonstrate the need for closer monitoring by government to identify the true coverage of the mobile network."

The latest fixed and mobile broadband coverage figures from Ofcom were revealed in its annual "Infrastructure Report" update, which also said that "super-fast" broadband services are now available to 73 per cent of UK premises, up from 65 per cent in 2012. However, the regulator said that 8 per cent of homes in the UK received fixed broadband speeds of less than the supposed minimum of 2 Mbps.

The report also shows consumers are making far greater use of public Wi-Fi hotspots, which have doubled over the year to 34,000 (from 16,000). The amount of data being sent or received by consumers in these hotspots almost tripled, to almost 2 million gigabytes in a month, up from 0.75 million gigabytes during the same month in 2012.

"We know consumers increasingly expect superfast speeds, but it's also important to make sure people can connect over a very wide area," commented Richards. "That is why we are doing everything we can to support moves to improve coverage in difficult areas such as roads and train lines."

Ofcom has already announced plans to look into the allocation of more spectrum in the 700 MHz band as well as spectrum formerly used by the Ministry of Defence in order to meet the demands of future high-speed mobile services, already now being dubbed "5G" by the regulator.

For more:
- see this Ofcom release
- see this separate Ofcom release
- see the Ofcom Infrastructure Report update (PDF)
- see this Daily Telegraph article

Related Articles:
EE slashes LTE prices, warns on capex cuts
Ofcom threatens fivefold increase in UK spectrum fees starting in 2014
UK LTE auction comes under spotlight over weak return
Ofcom picks BT, Microsoft and Google for 'major' white spaces trial

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