Telecoms Disputes: Why Regulatory Change is Creating Litigation Opportunity

The UK telecommunications sector is in a period of structural upheaval. The Electronic Communications Code has been revised, the valuation framework for site rents is changing as of April 2026, a major 4-to-3 merger has been conditionally approved on purely behavioural terms, and Ofcom's enforcement posture is becoming meaningfully more interventionist. Each of these developments creates legal risk. Taken together, they represent a sustained period of litigation generation across the sector — and the cases are already arriving.

The Electronic Communications Code: A Framework Under Pressure

The Electronic Communications Code ("the Code"), introduced by the Digital Economy Act 2017 and contained in Schedule 3A of the Communications Act 2003, confers statutory rights on operators to install and maintain electronic communications apparatus on, over, and under land. It replaced the predecessor code under the Telecommunications Act 1984 and fundamentally altered the balance of power between operators and landowners — principally through the adoption of what is known as the "no network" valuation model.

Under the Code's valuation framework, the consideration payable to a site provider for a new code agreement is assessed by reference to what a willing buyer would pay a willing seller for the relevant rights, on the assumption that no network is present and that the operator does not require the specific site. This strips away the historic "ransom value" that landowners had been able to command when operators needed their particular location. The practical effect was dramatic: site rents across the country fell sharply — in many cases by over 80% from pre-Code levels. Landowners and property investment funds which had structured portfolios around telecoms rental income found their revenue expectations fundamentally disrupted.

The Product Security and Telecommunications Infrastructure Act 2022 ("PSTIA 2022") amended the Code with effect from November 2023. The reforms introduced a duty on both operators and site providers to consider alternative dispute resolution before commencing tribunal proceedings, updated the interim order regime to permit applications under paragraph 35 in respect of live (rather than merely expired) agreements, and clarified the interaction between the Code and the Landlord and Tenant Act 1954 — an interaction that has proved fertile ground for litigation.

April 2026: The Valuation and Forum Changes

The most consequential near-term development for the industry is the set of changes that took effect on 7 April 2026. Secondary legislation introduced under PSTIA 2022 has extended the "no network" valuation model to renewal proceedings under Part 2 of the Landlord and Tenant Act 1954. This is significant because a substantial cohort of telecoms leases were granted before the 2017 Code came into force and are therefore subject to renewal under the 1954 Act framework rather than the Code. Until April 2026, those renewals had been valued on conventional 1954 Act principles — broadly, open market rent — which routinely produced materially higher figures than equivalent Code valuations.

The April 2026 changes close this gap. Renewal rents under 1954 Act proceedings will now be assessed on the same "no network" assumption that applies to Code agreements, meaning that site providers with legacy leases face a sharp downward reset in rental income upon renewal. The changes also transfer jurisdiction over these disputes from the County Court — which handled 1954 Act renewals as general civil proceedings — to the First-tier Tribunal (Property Chamber), which has developed specialist expertise in Code valuation and procedure.

Both changes are already generating uncertainty. Site providers with portfolios of pre-2017 leases approaching renewal are reassessing their negotiating position; operators are considering whether to accelerate or defer renewal applications to take advantage of the new forum and valuation rules; and legal practitioners in both property and telecoms regulation are adjusting their advice in real time. The volume of tribunal proceedings in this space is expected to increase materially through 2026 and 2027.

On Tower v BT: Contractual Break Notices and Code Termination

The most significant Code litigation of the past eighteen months is On Tower UK Limited v British Telecommunications PLC, which produced a Court of Appeal judgment that reversed the Upper Tribunal and has since been the subject of a Supreme Court permission application.

The dispute arose from the interaction between contractual termination provisions and the statutory mechanism under paragraph 31 of the Code. BT, as the site provider, had served two concurrent notices: a contractual break notice under clause 5.8(b)(v) of the lease, and a paragraph 31 statutory termination notice. The Upper Tribunal held that a paragraph 31 notice need only comply with the Code's statutory requirements; a site provider need not have validly exercised a contractual break option in order for the Code notice to be effective. It held that the break option was exercisable at the relevant date, which was sufficient.

The Court of Appeal disagreed. It held that the Code does not take precedence over contractual provisions and cannot be used to override them. If a break option has been included in the agreement, it must be validly exercised in accordance with the contract before a paragraph 31 notice can be served to terminate a Code agreement. The Court's reasoning re-establishes the primacy of contract in this context: operators and site providers alike must ensure that break notices are procedurally compliant with the lease terms — not merely exercisable in principle. A paragraph 31 notice served alongside an invalid contractual break notice is itself ineffective.

The practical implications are substantial. Operators who have served termination notices relying on paragraph 31 without having precisely followed contractual notice requirements are exposed. Site providers wishing to recover sites must audit their break clauses carefully before serving any termination notice. BT has since sought permission to appeal to the Supreme Court, and the outcome will have sector-wide consequences.

On Tower v AP Wireless: Sharing Rights and Wholesale Infrastructure

In On Tower UK Limited v AP Wireless II (UK) Limited [2025] UKUT 280 (LC), the Upper Tribunal considered the scope of sharing rights in Code agreements — a question of growing commercial importance as the wholesale infrastructure provider ("WIP") model becomes more prevalent in the UK market.

At first instance, the First-tier Tribunal had imposed restrictions on On Tower's right to share the site, limiting the number and type of operators with whom it could share. On Tower appealed on the basis that, as a neutral host WIP, its statutory purpose is to provide shared infrastructure to multiple operators — a purpose that is fundamentally incompatible with meaningful sharing restrictions. The Upper Tribunal allowed the appeal and confirmed that Code agreements should contain sharing terms permitting the operator to share both the site and its wider rights, not merely the electronic communications apparatus itself.

The Upper Tribunal's analysis engaged with the policy of the Code and the role of WIPs within the network infrastructure hierarchy. It is now clear that the Code envisages WIPs as participants in the regime — not as operators that can be contractually marginalised by site providers seeking to limit their commercial footprint. Permission to cross-appeal on other terms was refused. The decision provides operators and WIPs with a cleaner basis on which to negotiate and impose sharing provisions, though the question of how many sharing parties may be required in sensitive or security-constrained locations remains unsettled.

Cellnex v Secretary of State: Security, Sensitive Sites, and the Public Interest

That unsettled question was directly engaged in Cellnex Connectivity Solutions Ltd v Secretary of State for Housing, Communities and Local Government [2025], which concerned the installation of telecommunications apparatus on the rooftop of Croydon Crown Court as part of the Brighton Mainline Programme — an initiative to create seamless connectivity along the Brighton to London rail corridor.

The Secretary of State, as site provider, did not oppose the grant of Code rights in principle but disputed a number of terms, including the operator's sharing rights. As a WIP and neutral host, Cellnex argued that it required the ability to share with an unlimited number of Code and non-Code operators. The site provider sought to cap sharing at three operators, citing the security requirements of an active Crown Court and the administrative burden on court staff.

The First-tier Tribunal imposed interim Code rights on the parties, providing useful clarification on how security concerns at sensitive public sector sites should be balanced against operators' statutory purposes. The Tribunal declined to impose the site provider's preferred sharing cap but acknowledged that the specific character of the site justified certain tailored provisions. The case illustrates a broader tension that will recur wherever operators seek to install infrastructure at government-controlled or security-sensitive locations: the Code's policy imperative towards connectivity does not operate in a vacuum, and site-specific constraints will continue to generate dispute. Landlords and operators at security-critical locations should expect bespoke negotiation rather than template Code agreements.

The Vodafone/Three Merger: Behavioural Remedies and Regulatory Monitoring

In December 2024, the Competition and Markets Authority conditionally approved the merger of Vodafone UK and Three UK — the first occasion on which the CMA has approved a 4-to-3 consolidation in the mobile sector on the basis of purely behavioural remedies. The decision represents a significant departure from the CMA's historic preference for structural remedies and from its earlier stance in the blocked Hutchison/O2 transaction in 2016.

The remedies package includes a legally binding commitment to invest £11 billion in network infrastructure over eight years, together with time-limited price caps on key retail tariffs pending roll-out of the merged entity's 5G standalone network. Critically, the CMA's decision places Ofcom at the centre of ongoing compliance monitoring: Ofcom was explicitly identified as having the data, analytical capability, and sectoral expertise to oversee both the network investment programme and the pricing commitments. The CMA has effectively sub-contracted enforcement oversight to the regulator, a model that raises important questions about accountability and the scope of Ofcom's discretion where the merged entity falls short of its commitments.

For other market participants — MVNOs, enterprise customers, equipment suppliers — the merger creates both risk and opportunity. A reduction from four to three mobile network operators tightens the competitive landscape for wholesale access and roaming. The CMA projected an annual consumer cost of £216 million in the absence of adequate remedies. Whether the behavioural package in fact delivers the investment and pricing discipline it promises will depend on the rigour with which Ofcom monitors and enforces. Disputes between the merged entity and third parties — whether contractual or regulatory — are likely to be coloured by the merger's unique regulatory context for years to come.

Ofcom's Plan of Work 2026/27: Enforcement Priorities and Compliance Obligations

Ofcom's Plan of Work for 2026/27, published in March 2026, signals a more interventionist regulator across several fronts. Three themes are particularly relevant for dispute practitioners and commercial advisers.

First, the copper retirement and PSTN switch-off programme is approaching its statutory endpoint. The Public Switched Telephone Network is scheduled for decommissioning in January 2027. The transition from copper to full-fibre access creates contractual and regulatory obligations for Openreach as the wholesale access provider, for communication providers relying on legacy infrastructure, and for business customers whose service agreements were predicated on PSTN-based connectivity. Any disruption to the migration — whether caused by network readiness failures, supplier disputes, or access difficulties — is likely to generate liability exposure.

Second, the Telecoms Security Act 2021 ("TSA 2021") compliance programme continues. Ofcom has published a second annual Telecoms Security Report (covering October 2024 to September 2025) identifying ongoing gaps in supply chain security practices and security testing among a number of operators. The TSA 2021 confers significant enforcement powers on Ofcom, including the ability to impose civil penalties and issue compliance notifications. Operators who cannot demonstrate credible remediation plans following an adverse finding face both regulatory and reputational consequences. The forthcoming Cyber Security and Resilience Bill is expected to extend Ofcom's security oversight to data centres and other critical digital infrastructure, broadening the compliance perimeter further.

Third, Ofcom's alternative dispute resolution rules are changing. From 8 April 2026, the maximum timeframe for automatic consumer access to approved ADR schemes has been reduced from eight weeks to six. This accelerates the point at which unresolved complaints become ADR-eligible, increasing the volume and pace of formal escalations that operators must manage. Combined with the voluntary Telecoms Consumer Charter — published by the Department for Science, Innovation and Technology following correspondence with Ofcom and commitments from major providers — the consumer protection landscape is tightening on multiple axes simultaneously.

Consumer Pricing Disputes: The O2 Mid-Contract Price Rise and the Charter

The regulatory pressure on consumer pricing crystallised during 2025 when O2 implemented a mid-contract price rise that went beyond what had been indicated to customers at the point of sale. The increase provoked a formal exchange between DSIT and Ofcom, with the Department pressing the regulator to examine whether existing regulatory obligations were adequate or whether stronger intervention was required.

The outcome — published by DSIT in March 2026 — was the Telecoms Consumer Charter, a voluntary code of conduct to which the major providers have been invited to subscribe. The Charter goes beyond existing Ofcom rules in several respects: it requires that where a contract includes a mid-contract price increase, the core subscription price that customers sign up to is the price they pay, with increases permitted only where unforeseeable external events materially affect the cost of providing services. April 2026 is also the final date for any legacy inflation-linked price rise; all such contracts transition to pounds-and-pence terms thereafter.

The voluntary nature of the Charter introduces its own tension: providers who decline to sign face potential reputational exposure, whilst signatories may face contractual claims if they are found to have acted inconsistently with the Charter's commitments. The Charter is not a statutory instrument and does not itself create enforceable consumer rights, but it will feature prominently in ADR proceedings, Ofcom supervisory investigations, and any future regulatory review of pricing conduct.

Practical Implications by Stakeholder

The cumulative effect of these developments is not uniform across the sector. Each category of market participant faces a distinct risk profile.

Looking Ahead

Several issues remain actively in litigation or under regulatory review and will shape the telecoms disputes landscape through 2026 and beyond. The Supreme Court's response to BT's application for permission to appeal in On Tower v BT will be closely watched: if permission is granted, the fundamental question of whether Code notices must be grounded in valid contractual exercise — or merely in statutory compliance — will be definitively settled at the highest level. The PSTN switch-off in January 2027 will generate its own wave of commercial disputes as legacy service obligations are wound up. And the interaction between Ofcom's new monitoring role under the Vodafone/Three remedies and any enforcement action it chooses to take will define the boundaries of regulatory oversight in a consolidated market.

For businesses operating in or adjacent to the UK telecoms sector, the near-term priority is to map existing contractual and regulatory positions against the changes that have already taken effect and those that are imminent. The risk is not hypothetical: the cases already decided demonstrate that the sector's statutory framework is generating disputes of real complexity and material financial consequence. Operators, site providers, and infrastructure investors who engage with that framework proactively — with appropriate legal advice — will be better placed to manage exposure than those who wait for claims to arrive.