Britain’s biggest mobile network operators have warned ministers they could be forced to ration access to phone signals and introduce price rises at peak times as the war in Iran drives up wholesale energy costs and Whitehall excludes the sector from its flagship support package for the industry.
In a targeted intervention to the government, VodafoneThree, Virgin Media O2 and BT-owned EE have confirmed they are drawing up contingency plans to deal with rising electricity bills after they were specifically left out of the Chancellor’s British Industrial Competitiveness Scheme (BICS).
Measures being planned behind closed doors include throttling data speeds, restricting access during times of high demand and charging customers a surcharge at peak times – a move that would mark a significant shift from the all-you-can-eat tariffs that have dominated the UK mobile market for more than a decade.
Voice calls and mobile data are expected to be hit hardest by rationing, but fixed broadband services could also be affected. Senior industry figures also warned that ongoing cost pressures could result in 5G rollout plans being put on hold and jobs being either eliminated entirely or relocated overseas.
Frustration is running high in the industry after Rachel Reeves announced last week that 10,000 manufacturers would see their electricity bills cut by up to 25 percent through BICS. Although the measures are not due to come into force until April 2027, telecoms bosses argue that their sector, classed as critical national infrastructure, has an equally compelling case for government intervention.
“It’s a serious oversight,” an industry source told Daily Sparkz. “It raises real questions about what parts of the economy this administration actually considers strategically important.”
The sums involved are anything but trivial. Britain’s mobile networks use just under a terawatt hour of electricity annually, enough to power 370,000 homes. While operators routinely hedge their exposure to the wholesale market, prices are still up 70 percent in recent years, first due to Russia’s invasion of Ukraine and more recently following the closure of the Strait of Hormuz, the key shipping route through which about a fifth of the world’s oil and gas trade passes.
With UK electricity prices still tied to the gas market, the 33% rise in gas prices since the outbreak of hostilities with Iran has had a direct impact on operators’ cost bases. Unlike steelmakers or chemical plants, executives argue, cellular networks can’t simply shift demand to cheaper nighttime hours. Because the infrastructure is constantly available, they are structurally unprotected.
Any move toward a rationing signal that is seen as a worst-case scenario would prove politically toxic in a country where consumers are already angered by patchy reporting. The UK currently sits at the top of the G7 table for 5G download speeds, and the broader economic risks are significant: digital connectivity is estimated to contribute £6.6 billion to UK manufacturing annually.
The warning comes at an awkward time for the chancellor, who is already facing criticism from industry groups that BICS is both too modest and too slow to stop further job losses.
A spokesperson for Virgin Media O2 said: “Mobile and broadband networks are vital national infrastructure that almost every consumer and business relies on, but despite their importance, telecommunications companies have been excluded from support for other energy-intensive sectors. If the Government wants growth, productivity and resilience, it cannot ignore the digital networks on which the country depends.”
VodafoneThree made similar comments, with a spokesperson adding: “We are disappointed that the Government has chosen not to include the telecoms sector in the UK’s Industrial Competitiveness Program. At VodafoneThree we are committed to building the UK’s best network, creating jobs and adding billions of pounds of value to the UK economy. We urge the Government to consider the impact of rising energy prices on the vital telecoms sector, which enables growth across all parts of the economy.”
For SMEs already struggling with patchy rural coverage and rising operating costs, the prospect of peak-time surcharges or throttled data could represent a further headwind and give further reason to question whether the UK’s industrial strategy is keeping pace with realities on the ground.
