Government to invest £150m in boosting mobile phone coverage

The government is to invest £150m in improving mobile phone reception in areas of the UK where homes and businesses have poor or non-existent coverage.

Chancellor George Osborne said in a speech today that the move will extend coverage for "up to six million people", and mean that 99 per cent of the UK is covered by a mobile signal.

Procurement for the sites that will be used will begin in 2012, but a spokesperson for the Department for Culture, Media and Sport told V3 that no details beyond this have been set out.

Ovum principal analyst Jeremy Green described the announcement as "perplexing" given the tight financial constraints on the government and the lack of detail about how the money will be spent.

"It's hard to know what the justification is for giving public money to profitable private companies to help them do something the regulatory framework and licence obligations should be inducing them to do anyway," he said.

"It is not at all clear how the money will be used to buy the little coverage it will provide. Will this be a straightforward handout to the network operators? Or will it go to an entity like Arqiva, which provides shared resources to the operators?"

However, Bob Warner, chairman of the Communications Consumer Panel, welcomed the announcement, arguing that it will provide a vital boost for people in remote areas.

"Inadequate mobile coverage is a major concern for the Panel, and we have campaigned for intervention to improve coverage for rural communities and small businesses," he said.

"A pure market-oriented approach to delivering coverage for 2G voice services has now reached its economic limit."

The government also aims to provide the entire nation with a minimum 2Mbit/s broadband, and 90 per cent with 25Mbit/s, by 2015 as it seeks to close the digital divide.