Budget’s broadband billion boost: Industry reacts

Budget’s broadband billion boost: Industry reacts

UK Chancellor Phillip Hammond today announced over £1 billion of investment to boost broadband speeds for two million homes and businesses.

 

This includes £400 million for the digital infrastructure fund, which the government expects to be match funded by private investment. A further £740 million will go to 5G investment, with local authorities who successfully bid to help trial 5G mobile networks in the UK receiving a slice.

 

Much of the £400 million investment pot will go to companies expanding fiber coverage in rural areas in an effort to turn the UK into a Fibre-to-the-Premises (FTTP) country.

 

As well as boosting technology investment in the UK and encouraging private sector involvement, as with Surrey University’s 5G innovation Centre, the upgrade for the UK’s digital infrastructure is also part of the gorvernment’s plan to try and increase UK productivity per capita, which trails behind many other similar countries.

 

Here’s how the industry responded to the proposal:

 

Broadband sellers:

Darren Ridge, CEO of Onecom, welcomed the package, stating, ‘Fast, reliable digital infrastructure is not a luxury – it’s a necessity, and one which will only become more important as the ‘Internet of Things’ becomes a larger part of how we run our businesses.

 

‘The government clearly recognises that investment in high-speed internet is an investment in the future of British business. We firmly believe that fibre is the future, and making it available across the UK is key to ensuring that the nation plays its part as a digital leader on the world stage.’

 

Ewan Taylor-Gibson, broadband expert at uSwitch.com, comments: ‘Future-proofing our telecoms infrastructure by investing in fibre should have wide-reaching benefits for a digital, connected society and the economy, too, helping us keep pace with other countries.

 

‘But we're already on the back foot. The UK has fallen far behind most EU countries, where ultrafast-capable fibre-to-the-home services are common and, meanwhile, the take-up of existing fibre services is still fairly low.

 

‘Superfast fibre broadband is available to 90% of the UK, yet 20 of the UK’s 42 biggest cities are registering actual average speeds of below 24Mbps. And three in 10 broadband users register actual speeds of less than 5Mbps, while just 10% log speeds of above 50Mbps.'

 

Analysts:

Alex Holt, head of technology, media and telecommunications at KPMG UK explained, ‘The Chancellor’s announcement of a 100 per cent business rates relief for five years on fibre is designed to change the investment economics for operators, so that new fibre investments are more attractive. As always, the devil will be in the detail, but today’s announcement is likely to be an important consideration for a number of network operators when planning their fibre strategies for the next few years.

 

‘These operators will be looking for clarity from the Government on what the announcement means in practice, and this will need to be provided quickly if the Government’s goal of changing investment plans is to be achieved. ‘

 

WiredScore fixed line and wireless connectivity tester WiredScore’s William Newton, said, ‘With its new targets for full-fibre broadband, the government is setting goals that will truly future-proof the UK’s connectivity infrastructure – rather settling for part-fibre investments that will not meet the digital needs of businesses and consumers in five years and beyond.

 

‘There is certainly a long way to go before the UK becomes fully fibre – with many areas still not yet benefitting from the government’s previous ultrafast or even superfast targets. But this new investment is another clear example of the government’s essential investment in ensuring that the UK stays at the forefront of future-proofed digital industries.’

 

Stuart Orr, advisory partner at EY, explained why the funding will help the UK’s digital infrastructure, ‘Additional funds to fuel the rollout of faster broadband come at an important time. While the UK scores well compared to other markets in roll out of ‘entry level’ fibre broadband, other countries and their economies are already benefiting from extensive coverage of ‘full fibre’. At the same time, a continued focus on connectivity speeds in rural areas must remain a priority for providers.’

 

Robin Kent, director of European operations at Adax expressed, ‘We applaud the chancellor for putting aside more than £1bn for faster UK broadband, to accelerate the country’s digital transformation and allow local authorities the chance to trial superfast 5G mobile networks. ‘

 

 ‘There is a lot of talk about 5G being the next big thing in the telco world. However, it is important to be cautious. We are still seeing issues with current 3G and 4G networks, so the move to 5G isn’t necessarily going to be a smooth as some might think. It is, therefore, vital that service providers don’t run in blind, but have the right tools in place for 5G to be successfully implemented.’

 

‘The focus right now should be on ensuring that 4G works sufficiently before turning our attention to the much mooted 5G. Whilst 5G is theoretically 40 times faster than the hypothetical limit of 4G, for it to fulfil its claims it will take a great deal of pricy upgrading of the current infrastructure.’

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