James Pearce outlines the job ahead for the new Conservative government within the telecoms space following their recent General Election victory
Results are in. The ballot papers have been counted, boxes have been ticked, pollsters have been embarrassed and, much to the surprise of everyone, the Conservatives have returned to government, this time with a majority.
The surprising results of the May 7 election were not welcomed by everyone, with protests in London and Cardiff, but perhaps less surprisingly, they were embraced by the mobile industry.
Dealer reaction to the 2015 election result was overwhelming, with some even going as far as saying a Labour win would have been “a disaster” for small and medium-sized businesses.
Why was the channel so supportive of a Tory victory? I would argue that it isn’t just because mobile is a fairly wealthy market.
Rather, Labour had turned away businesses with rhetoric that was at best anti-business, something even members of Ed Miliband’s former shadow cabinet have admitted to.
If you focus too much on wealth-creators, such as businesses, and don’t offer them support, then you run the risk of isolating them, something “Red Ed” managed to do.
Even long-time Labour supporters such as Apprentice star Lord Alan Sugar have distanced themselves from the Labour party based on the approach it took to business during the campaign.
Going forward
So what now for the mobile sector, given that the Conservatives have a majority in charge?
Some legislation around mobile is in need of urgent reform. The Infrastructure Bill and the Electronics Communication Code are both hindering the operator’s ability to improve coverage, according to Vodafone CEO Vittorio Colao, O2 CEO Ronan Dunne and EE’s Olaf Swantee.
They’re spot on. Research from the Mobile Operators Association found the networks pay almost 30 times the rental rates of utility companies, which adds up to £271 million a year that could be invested elsewhere.
The coalition agreed to look at the ECC and now the new government needs to act on that and reform it, or risk stunting mobile growth.
London mayor Boris Johnson, who is now an MP, has also promised to bring 5G to the capital by 2020, a move that would put the UK at the forefront of mobile connectivity and make it one of the most advanced countries in the world. Let’s hope he follows through.
EU Concerns
Despite the positive reaction to the election, the Conservatives manifesto still contains some potential hurdles for the mobile industry, most notably in the form of the EU referendum.
Speaking at a roundtable event following Vodafone’s end-of-year financial results last week, Colao warned that if the UK left the EU, it would lead to a “rethink” in Vodafone’s strategy.
He isn’t the only one who has expressed concern, with several dealers admitting that businesses who traded across Europe were reluctant to make major investments into their telecoms infrastructure with a so-called “brexit” hanging over the country.
EU reform will be widely welcomed by the channel if it leads to less red-tape and helps to promote growth, but leaving the economic union could have a devastating impact on trade.
These are all considerations for David Cameron to take on board as he plans for the next five years in Number 10.