The Costs of Mobile 'Not-Spots'

For Release

Thursday
March 12, 2015

A new study from RAND Europe finds that rural areas lacking a mobile phone signal (“not-spots”) experience a negative impact on businesses of all sizes, and could suffer detrimental effects to the long-term sustainability of communities.

Indeed, residents and businesses place a tangible economic value on a high-quality, reliable mobile phone signal, and are willing to pay to reduce the distances that they must travel to obtain mobile phone service.

Project findings
This study estimates the value of mobile not-spots in rural areas, using a series of choice experiments to gain an understanding of the value that individuals put on mobile phone coverage. It found that a lack of mobile signal impacts rural businesses, and that local residents and visitors would be willing to pay for better mobile coverage. In detail:

  • More than 97 per cent of residents of and local visitors to not-spot areas owned a mobile phone for personal use, and more than 85 per cent of those who ran businesses from home owned a mobile phone. A main reason cited for having a mobile phone was to deal with emergencies.
  • A substantial proportion of business respondents saw being located in a not-spot area as a drawback, with about half of businesses reporting negative impacts on profit, revenue and productivity.
  • Residents reported being willing to pay £12 per month (+/- £4.10 at 90 per cent level of confidence), and businesses around £20.90 per month (+/- £11.50), to avoid having to travel to get a 2G mobile phone signal of the same quality as that currently available to other areas nearby. The further distance people reported having to travel to get a signal, the greater their willingness to pay for local connectivity.
  • A key interpretation of the research is that the availability of mobile services may affect the long-term sustainability of rural communities and could be an important factor in ensuring their economic diversity.
  • Some younger respondents indicated that a lack of mobile signal makes a place less desirable to live in. Almost all respondents felt that improved mobile reception is a positive thing for the whole community. Various reasons included the value of mobile connectivity for those seeking employment, helping people to manage their time better, reducing people’s anxiety about being out of contact, and helping businesses to collaborate.

Charlene Rohr, director of the choice modelling and valuation group at RAND Europe and the principal author on the study, said: “Most of us take it for granted that we can get a good signal when we want to use our mobile phone. But 80,000 premises in the UK are located in areas without mobile phone coverage, and our choice experiments show the value placed by businesses and residents of these areas on eliminating mobile telephony not-spots.”

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RAND Europe is an independent not-for-profit research institute whose mission is to help improve policy and decisionmaking through research and analysis.

Project background: This research was undertaken by RAND Europe in collaboration with Accent for the UK Department for Environment, Food and Rural Affairs (Defra) and the UK Department for Culture, Media and Sport (DCMS). In this study the social and economic impacts associated with eliminating mobile not-spots areas were examined using a mix of qualitative and quantitative methods to assess the value that residents and businesses in not-spot areas, and local visitors and tourists to not-spot areas, are willing to pay for mobile phone coverage.

About the RAND Corporation

The RAND Corporation is a research organization that develops solutions to public policy challenges to help make communities throughout the world safer and more secure, healthier and more prosperous.