UK mobile network operators have said the sector may not keep up with expanding usage and data consumption without government support.

According to industry body Mobile UK, which represents O2, Vodafone, Three and EE, the mobile industry is facing several pressing challenges, including rising costs due to inflation following a decade of flat or declining revenues.

The industry must also accommodate rising demands for data – which will require major investments in network capacity infrastructure – and demands from the government such as social tariffs for people who can’t afford data plans.

Mobile UK said that “it cannot be overstated how important it is that we have a positive investment environment” if the sector is to expand both 5G coverage and capacity across the country.

A series of major announcements are expected for Wednesday’s Budget as it will be the last before the next general election.

Mobile UK said the outlook of investors could be improved by removing annual licence fees...