First phase of Shared Rural Network set to bring £187m boost to UK rural businesses

O2 has released data showing that a reduction of partial not-spots during the first phase of the Shared Rural Network (SRN) roll-out could see UK rural communities contribute an added £58.9m to UK GDP each year, with Scottish businesses and areas of the hospitality sector in line to enjoy the biggest gains.

The £1.3bn SRN programme was first proposed in October 2019, aiming to wipe so-called “not spots” from the map, providing what the government claims will be “high-quality” 4G coverage to 95% of the UK by 2025. This followed years of complaints by mobile consumers and businesses that the major political parties had consistently failed rural businesses by lacking a credible solution to improve mobile 4G and 5G coverage.

In practice, the SRN will be made possible through a partnership between the UK’s four major telecoms operators – EE, O2, Three and Vodafone – which will invest in a network of new and existing phone masts they will all share, overseen by a jointly owned company called Digital Mobile Spectrum Limited.

The four networks have committed to legally binding contracts and investing £532m to close almost all partial “not spots” – areas where there is currently only coverage from at least one, but not all operators. The investment will then be supplemented by more than £500m in government funding to eliminate total not spots – hard-to-reach areas where there is currently no coverage from any operator. The legally binding coverage commitments will be enforced by UK regulator Ofcom.

Affirming its role in the scheme and outlining the positive outcomes from phase one, which was announced on 27 January 2021, O2 said it was committed to leading the rural charge and has commissioned research firm Development Economics to model the benefits this will bring to rural businesses and individuals, with the report finding that once the first phase of the roll-out has been completed, rural businesses situated near new mobile mast sites could benefit from an annual increase in turnover of £187.7m.

It added that access to the Shared Rural Network for individuals and businesses will also allow these rural communities to contribute an extra £58.9m to the UK economy each year, at a time when the economy needs it most.

When broken up into regions, the Development Economics report found that the largest share – around 28% – of the gains in business turnover and productivity were expected to occur in rural Scotland, valued at £79m in additional business turnover and a £24.1m added contribution to the UK economy. This was followed by Northern Ireland, which will see 16% of the predicted net gains, South West England with around 15%, Wales with 14% and the North West of England with around 8%.

The report also revealed that 42% of the projected increase in turnover will benefit those in the struggling hospitality sector, covering rural distribution, hotels and catering businesses, which are in line for a £78.8m boost to revenues. This boost could mean the difference between staying open or closing for many pubs and hotels, making the Shared Rural Network a potential lifeline for this beleaguered sector.

The other sectors that account for the largest shares of the increase in turnover are expected to be transport and communications, with 17% of the predicted revenue increase, and professional, financial, property and business services, which will enjoy 10% of the increase.

“The last year proved that reliable mobile connectivity has been essential for keeping us all connected to our loved ones and keeping businesses across the UK up and running – and 2021 is set to be no different,” said O2 chief operating officer Derek McManus.

“Our latest research shows that mobile has the power to make a real, positive difference to people in rural communities and demonstrates the difference we can make when operators, the government and Ofcom work together to achieve a shared objective.”

Jemma Clifford, director and co-founder of the Rural Business Group, which aims to enable UK rural businesses to access information via a single point, added: “We come into contact with hundreds of rural businesses each year through the Rural Business Awards and have heard first-hand how connectivity can make a huge difference to rural businesses right across the country.

“We welcome the work of the Shared Rural Network and O2’s own investment in its 4G network in continuing to reach rural areas yet to see this benefit and allowing these rural businesses to flourish.”