The economic impact of total gigabit broadband coverage could be worth up to £51.4 million over five years to the UK according to a new report from Assembly Research.
The report, commissioned by Huawei, said the British telecoms industry was ready to support an ambitious rollout schedule but would require favourable regulatory environment and the necessary support to cover non-commercially viable parts of the country.
The vast majority of the UK’s broadband infrastructure is delivered by fibre the cabinet (FTTC) technology that uses copper for the final few metres of a connection. However Openreach, Virgin Media and ‘altnets’ like Cityfibre, Hyperoptic and Gigaclear are all now investing in ‘full fibre’ networks.
- Three CEO: Not everyone needs full fibre
- Openreach plots copper switch off
- Openreach CEO: Johnson fibre targets 'a stretch'
UK full fibre
The government itself as adopted a ‘fibre-by-default’ approach to connectivity and wants total coverage by 2025. Both Openreach and the altnets have said they could reach 15 million premises by 2025 if there was a favourable investment climate and could go even further with the right support.
At present the UK lags behind other countries in Asia and Europe in terms of fibre coverage. Indeed, among European nations the UK has the third-lowest penetration rate at just 2.8 per cent, according to FTTH Europe. Some have placed the total cost of extending coverage nationwide – including rural areas – at £30 billion. To this end, the government has already pledged £5 billion for rural coverage.
Assembly says one advantage of being a late mover is that the UK government can learn policy lessons from other nations that have much greater coverage. However it also warns that any further delay could be damaging. Missing out on the 2025 date by a year could cost £9.7 billion in productivity benefits and a two year delay would incur a £28.7 billion penalty.
“Access to reliable, future-proof digital infrastructure for all isn’t a luxury, but now accepted as a necessity whether it’s used for work, education or play. Increasing investment in key digital infrastructure will provide the bounce-back and economic recovery the UK will desperately need in the months and years ahead,” said Matthew Howett, principal analyst and founder of Assembly.
The firm has urged policymakers to maintain recent momentum with a positive regulatory framework and to make more funding available for non-commercially viable areas.
There is also a recommendation fro a technology-neutral approach so that 5G Fixed Wireless Access (FWA) services can be used in areas that fibre cannot reach. New entrants should also be encouraged, possibly on a local basis. Ofcom has already said it will adopt a more flexible regulation in order to take into account regional differences.
The report also called for a reduction in red tape to speed up deployment and lower costs. Telcos have long called for reforms to the Electronic Communications Code that give them the same access as other utilities while there have also been complaints about business rates.
Finally, there is a demand for governments to promote adoption of gigabit broadband. Without this, the report argues, the risk of investing in the communications infrastructure that the UK requires is significantly higher. Increased awareness would improve the prospect of a return on investment.
- Here are the best BT broadband deals for April 2020
