A mobile telephone mast is seen in Cobham, U.K., on Monday, Oct. 8, 2012. Deutsche Telekom AG and France Telecom SA's U.K. mobile-phone venture Everything Everywhere will become the first local operator to offer faster data services as it starts a 4G network in London, Birmingham, Cardiff and Bristol. Photographer: Jason Alden/Bloomberg
A mobile telephone mast in Cobham, Surrey. Many rural areas are still unable to access 4G © Bloomberg

The government has ordered Britain’s big mobile operators to deliver on a pledge to end so-called “not spots” in rural areas as a deal struck between the companies teeters on the verge of collapse.

Boris Johnson promised to end the “scourge” of poor mobile phone connections in many parts of the countryside in his first 100 days after the general election by formalising an agreement between the four mobile companies to create a “shared rural network”.

But a last-minute proposal by BT has threatened to undermine the prime minister’s promise, prompting a stern rebuke from James Heath, director for digital infrastructure at the media department.

In an email to the four mobile network operators — BT’s EE, Three, O2 and Vodafone — he ordered them to “step up negotiations” and finalise a deal by the end of the week, according to industry sources.

The £1bn project, which is half-funded by the government, has been close to completion for months but squabbling between the operators over how to pay for the initial sharing of infrastructure threatens to scupper the deal.

The dispute over the deal relates to BT’s proposal to include 320 proposed new masts into the agreement and to charge 250 per cent more than the existing commercial rate to access the operator’s towers.

BT, which has the largest network in the UK, has defended its position, arguing that its proposals are fair and that it sees no reason why the deal could not be concluded by the deadline.

“We’ve proposed a far simpler and more pragmatic way for shared rural network to succeed in the 100 day window, plus a way to reduce any taxpayer money by also including new sites that are being built by us in the future. It’s now down to the industry to finalise the deal to get it done,” a BT spokesman said.

The chief executives of the four networks are scheduled to hold further talks this week along with discussions with the government. One executive said that if a deal is not thrashed out by the end of the week, the deadline for the deal would be missed and that the agreement could collapse altogether.

“We are still committed to the shared rural network but these latest developments seriously undermine the viability of the project,” said Derek McManus, chief operating officer of O2’s parent Telefónica UK.

The network sharing deal is expected to boost 4G coverage to 95 per cent of the UK by 2025 from around 91 per cent today.

The warning from the media department is the second time that the government has intervened in the long-running industry talks to create a shared rural network. Last year, the networks were threatened with legislation to force them to share masts in a bid to solve the problem of poor coverage.

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