A defeat in court for mobile phone giant Vodafone could pave the way for a raft of legal challenges by landowners who host 5G phone masts.
Telecoms providers such as Vodafone, who pay billions of pounds to landowners in rents every year at thousands of sites, were hoping to reduce their payments under the Electronic Communications Code (ECC), introduced in 2017. The code was intended to accelerate the roll-out of 5G by cutting costs for operators to install the infrastructure quickly and cheaply.
Having spent the not inconsiderable sum of £3.5billion in rents last year across its estate, Vodafone attempted to make use of the law in an early test case. The company had wanted to reduce its rent bill for a site owned by a Monaco-based property developer but lost in the County Court in Manchester.
Judge Martin Rodger QC ruled that Vodafone should pay rent to the landowner, Hanover Capital, based on the value of the land to the operator, rather than the value of the land itself, which would be much cheaper.
The judge based his decision on the fact that four operators use the phone mast situated in a car park on an industrial estate outside Stockport, thereby highlighting its importance to them. Vodafone reckons that only around 10pc of its 18,000 sites in the UK are shared with other telecoms providers.
Pressure to speed up progress of 5G
While the company had hoped to cut this particular bill by several thousand pounds, it has spent in excess of £300,000 fighting the case because of the impact it will have on rents at its other phone masts across the UK.
Hanover Capital, a company based in the Isle of Man, is owned by Mark Harrison, a property magnate originally from Manchester but now resident in Monaco. He also owns property investment firm Praxis.
Lawyers acting for Harrison said he considered the terms Vodafone was offering were ‘unfair’ and decided to fight them. They pointed out that other landowners would now be able to employ a useful benchmark with which to negotiate a better deal. It could mean thousands more landowners fighting the company and disputing rents.
The defeat for Vodafone comes at a time of pressure for reforms to prevent such battles in order to speed up the installation of 5G infrastructure across the UK. The investment is expected to result in a major economic uplift for the country. However, critics of the Electronic Communications Code contend that loopholes within the code render it unfit for purpose.
5G undermined by ‘grey areas’ in law
Last month, operators teamed up to launch the Speed Up Britain campaign, chaired by the former Digital Minister Ed Vaizey. The campaign is calling for the code to be reformed, arguing that the UK risks falling behind in the race to take advantage of the benefits of 5G.
Vaizey argued recently that the defeat is yet another example of the Government’s plan to give the UK the best possible mobile networks being stymied by grey areas in the law. The changes to the code the campaign is proposing would address these and enable the country to move forward at a time when connectivity has never been more important.
Victoria Dobson, of law firm EMW, agreed, saying that the defeat was bad news for Vodafone and other operators because landowners will now be more likely to challenge them on rents. Increasing disagreement, she added, between operators and landowners is without doubt hindering progress on the roll-out of 5G technology.
At this time, it is unclear whether Vodafone will appeal the outcome of the hearing. The company was approached but declined to comment on the case.