BT and mobile networks warn of rising cost of Scotland split

BT, TalkTalk and all of the UK’s major mobile networks have warned of rising costs if Scotland decides to vote for independence.

In an open letter signed by the CEOs of BT, TalkTalk, EE, Vodafone, O2 and Three, the companies warn that costs – and by implication, prices – may rise after the split.

What approach would the government of an independent Scotland take to the radio spectrum, without which mobile networks cannot operate?

“We may need to modify our networks to reflect the reality of an independent Scotland,” the CEOs write. “And we may need to consider whether to modify the services offered in Scotland, given its relatively demanding topography and relatively low population density. Any of these factors could lead to increased industry costs.”

That statement implies that Scotland is effectively being subsidised by more urban areas of the UK, although we note that the signatories stop short of promising a price cut to the rest of the UK if Scotland does decide to go it alone.

Who’s the regulator?

The networks also express concern over the regulatory uncertainty that would be caused by a split. It isn’t clear whether Ofcom would continue to regulate the telecoms of an independent Scotland, or whether the country would seek to create its own telecoms regulator.

“Specifically, we would need to know how a Scottish telecoms industry would be regulated,” the open letter states.

“Would there be continuity with the current European Union regulatory framework so that we would continue to operate across the border with common infrastructure under a single set of rules? What approach would the government of an independent Scotland take to the radio spectrum – currently licensed on a UK-wide basis – without which mobile networks cannot operate?”

Spectrum is currently licensed by Ofcom, which oversaw the recent 4G auction, for example. A spokesperson for Ofcom said the regulator wouldn’t speculate on how an independent Scotland’s telecoms would be controlled.

Despite lobbing these hand grenades into the debate, the networks say they “remain fully committed to our customers, employees and operations in Scotland”.