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The chief executives of six telecoms companies operating in the UK on Saturday issued a highly unusual joint letter suggesting industry costs could rise if Scotland voted to become independent.
The companies – BT, TalkTalk, Telefónica UK (owner of O2), Vodafone UK, EE and Three UK – said they would remain committed to their employees and operations in Scotland and to providing “quality affordable services” to customers there.
But the companies noted uncertainty about regulatory and spectrum allocation arrangements and said they might need to consider modifying services in Scotland because of its more challenging geography and low population density.
“Any of these factors could lead to increased industry costs,” they wrote in a letter tweeted by the pro-union Better Together campaign.
The letter followed efforts by Downing Street officials to get the telecoms groups to come out against independence, according to people familiar with the approaches.
“Number 10 has been ringing around and wanted the industry to present the bigger picture around cost and uncertainty if there was a split,” said one person close to the situation.
The talks have been between officials at Number 10 and company policy teams rather than through a direct approach from Mr Cameron to their chief executives.
Telecoms executives say that they are also still unsure about the impact of devolution given uncertainty about the national rules over spectrum ownership, although many agree that there is a risk that prices could rise should they be needed to reach remote areas of Scotland.
In an interview this week, O2’s chief executive Ronan Dunne also said that Scottish consumers may face higher mobile costs should Scotland vote for independence owing to the administrative cost of splitting the business across two sovereign states.
The Scottish government has promised to re-auction telecoms licences on independence. According to a report from Enders, the research group, Scotland’s per capita share of the last auction of 4G spectrum would be £200m of the total raised of £2.3bn.
The 2G and 3G licenses that sold for £22bn in 2000 may also be re-auctioned, Enders added, which could generate £1.8bn for Scotland on a per-capita basis.
However, the Scottish government white paper on independence states that coverage of the whole of Scotland would be given priority through coverage obligations, which was likely to increase the cost and heavily reduce the price operators are willing to pay. “In telecommunications policy, our approach will give greater priority to improving geographic coverage, particularly in remote rural areas,” the white paper says.
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