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Government awards non-taxpaying Arqiva £150m rural mobile deal and Camden WiFi contract

Updated Deal with Arqiva will improve rural mobile coverage
Wed May 15 2013, 13:35

THE UK GOVERNMENT has awarded a poster child for tax avoidance a £150m contract for improving rural broadband.

The UK tax system is something of a bad joke, as Vodafone might be able to tell us, but won't. Likewise Google.

Arqiva, like Google, Starbucks and Amazon, has been accused of skirting the system and paying a turnip cart's worth of tax on lorry loads of lovely lettuce.

There was no room for that in its celebratory statement though, just soothing words of broadband benevolence against the background noise of popping champagne corks.

"We're excited to be working with the Government and Mobile Operators on this important initiative," burbled Nicolas Ott, MD for government, mobile and enterprise at Arqiva.

"By investing in mobile infrastructure, the Government can help bridge the social and technological divides created in areas where commercial service is not economical, and we're proud to be part of this process. MIP (the Mobile Infrastructure Project) perfectly fits within our strategy of creating a range of platforms cellular, WiFi and small cells that provide mobile connectivity to all and support a thriving digital economy in the UK."

MIP, or the Mobile Infrastructure Project, is the government's way of casting increased mobile coverage over rural areas. Arqiva will spend the £150m on rolling out high speed mobile broadband to as many as 60,000 premises and "sections of road".

"Arqiva's appointment today is great news for rural communities throughout the UK, who stand to benefit enormously from this £150m project to improve mobile phone coverage," said culture minister Ed Vaizey.

"Good mobile connectivity is becomingly increasingly important and it is crucial that businesses and individuals are not left struggling with poor and intermittent coverage."

In January the firm said that it has not paid corporation tax in the UK since 2004, but explained that it provides for the country in other ways.

"Arqiva is a privately funded UK organisation based and operating substantially within the UK. It is a fact that we haven't paid corporation tax since 2004," it said.

"Any tax liabilities that would normally have been accrued have been more than offset by the capital allowances arising from the significant investment in the UK's Digital Switch Over... Arqiva's accounts and practices are audited, open and transparent. Our shareholders have not taken distributions or interest on loans since 2009 in preparation of the refinancing of our corporate debt. We do not accept any inference that we enter into practices that mean we avoid our statutory legal duties in paying tax to the UK, either corporately or as an employer for our 2,000 employees."

Arqiva told us today that it plays the UK tax system fairly, repeated that it pushes money back into the UK and said that it has regular time with the tax authorities.

"Arqiva has invested heavily in the UK's communications infrastructure in recent years. Most notably, we funded the £630m project to roll out Digital TV across the UK which generated significant capital allowances as a result of investment into the UK," it said in a statement.

"Arqiva is in constant dialogue with HMRC and our tax affairs are fully compliant with UK regulations."

Presumably the firm is in as regular contact with the Government as it is with the HMRC.

While a metaphorical bath was filling with £150m in MIPs cash another deal was being signed that will see the firm provide a carpet of WiFi coverage in Camden, North London.

Camden council cabinet member for finance, councillor Theo Blackwell said that the project would help to make Camden "one of the most connected places in the country".

The service will be rolled out from 1 June 2013. Other London locations will follow. µ



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