Boris Johnson has announced plans to save £5m over nine years from the Transport For London budget. Like any public transport system it's run at a loss subsidised by taxation. Bus passengers pay about half of what it costs to move them around.
But Transport For London is also a commercial organisation, with huge revenues from the advertising and as a landlord.
The oldest, deepest and largest underground system in the world, the London underground has a mobile phone opportunity like no other. Phones don't work in the bits of the tube that are underground. Most other metro systems have put in base stations but labour problems and politics have meant that the tube has worse communications than the African rift valley.
The new commercial regime could exploit the isolation to provide a network of its own. There are seventeen licensed mobile phone networks in the UK. Five of them are big well-known brands: Orange, O2, 3, T-Mobile and Vodafone, The other dozen bought spectrum at the low power guard bands in 2006. These are not MVNOs like Tesco and Virgin Mobile but networks with 6.6MHz of their very own spectrum. While the big five paid over £3bn for their 3G licences the dozen paid between £50,000 and £1.5m. True it's much less spectrum but it's still very much cheaper.
What co-operation between one of the guard band licensees and a commercially minded Transport For London would provide is a GSM mobile phone network which gave coverage on the third of the network that is underground every bit as good as that which is on the two thirds that is overground. But with a difference, instead of the money from the call revenue going to one of the big five networks it would go to the train network. Everyone on the train would be roamed to London Underground.
Of course this would mean that when trains were stopped in a tunnel for twenty minutes cynics will accuse London Underground of doing deliberately so that they can make money out of a trainload of people calling work to say that they will be late, But then we accuse London Underground of lots of things, although we realise that they are not actually that smart and couldn’t co-ordinate such a thing.
It gives consumers a better service. No-one wants to be out of touch. It's not as though the tube is some idyllic place that benefits from no mobiles. OK, It's better since Boris banned alcohol and frowned on smelly food, but we've no problems with people using mobiles on the over ground parts, the lack of coverage is all to do with physics and not design.
Using one of the twelve small carriers, and UK01 would be the obvious choice as they are the only ones to have done something with their spectrum, solves the problem of having to treat the big five equally. It would be technically challenging to give five rival companies equitable access to the difficult conditions under London. Similarly Ofcom might have something to say if only one of the big networks was given access and subsequently had an unfair advantage, but UK01 has fewer than 5,000 active subscribers so it’s not as if they are a threat to the others.
Quick calculations on the back of an envelope show that the call revenue to London Underground might be as much as £500m over three years. Certainly something to help with the hole in the budget that Ken left.
Cat Keynes publishes her thoughts on the mobile phone industry every Sunday at www.catkeynes.com you can read the column the previous Friday by subscribing here.
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