Mobile phone giant Vodafone has suffered a defeat in court that could open the door to a wave of legal challenges by landowners that host 5G phone masts.
Operators such as Vodafone pay landowners billions of pounds in rents every year at thousands of sites – but hoped to reduce these under the Electronic Communications Code, which was introduced in 2017.
It was designed to speed up the roll-out of 5G by cutting costs for operators hoping to install the infrastructure quickly and cheaply.
Challenge: The Electronic Communications Code was designed to speed up the roll-out of 5G by cutting costs for operators
Vodafone alone spent £3.5billion in rents last year across its entire estate and tried to use the law in an early test case.
It wanted to cut its rent bill for a site owned by a Monaco-based property tycoon 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 to the operator as opposed to the value of the land itself, which would be much cheaper.
The judge said he came to his decision because four operators use the phone mast in a car park on an industrial estate outside Stockport. Vodafone estimates that only around 10 per cent of its 18,000 UK sites are shared with other operators. Although Vodafone was only hoping to slash a few thousand pounds off this particular bill, it had spent more than £300,000 fighting the case because of the significance for rents at its other phone masts across the country.
Hanover is an Isle of Man-based company owned by Mark Harrison, a property entrepreneur originally from Manchester but now based in Monaco. He also owns property investment firm Praxis. Lawyers for Harrison said the terms Vodafone was offering were ‘unfair’ and he decided to fight them. They said other landowners would now have a good comparison to help them negotiate a better deal.
It means thousands more landowners could now fight the company on rents.
The defeat for Vodafone comes amid calls for reforms to prevent these rows in order to speed up the installation of 5G infrastructure across the country – which is expected to provide a major economic boost. Critics of the Electronic Communications Code argue there are loopholes that mean it is not fit for purpose.
Operators joined forces last month to establish the Speed Up Britain campaign, which is chaired by the former Digital Minister Ed Vaizey. It is calling for the code to be reformed and argues the UK will fall behind in the race to cash in on the benefits of 5G.
Vaizey told The Mail on Sunday: ‘This is another example of the Government’s plan to give Britain the best possible mobile networks being held back by grey areas in the law. The changes we’re proposing to the Electronic Communications Code can address this and help move us forward at a time when connectivity has never been more important.’
Victoria Dobson from law firm EMW said the outcome was bad for Vodafone and other operators because more landowners will now challenge them on rents.
She said: ‘Growing friction between landowners and operators is definitely hindering progress on the roll-out of 5G technology.’
It is unclear whether Vodafone will appeal the outcome.
Vodafone declined to comment on the case.