Cost of rolling out fibre broadband to be slashed, remote rural areas prioritised for funding, full fibre switchover and the end of copper, and increased access to spectrum for innovative 5G services.

Mandatory full fibre broadband for all new build homes and a new priority to connect hard-to-reach rural areas are key measures proposed in a national, long-term strategy for UK telecommunications.

The new approach is aimed at driving large-scale commercial investment in the fixed and wireless networks that are vital for the UK to remain globally competitive in a digital world.

Commenting on the the Future Telecoms Infrastructure Review published this morning, Chris Richards, Head of Business Environment Policy at EEF, the manufacturers’ organisation, said:

“Today's Review is a major step towards delivering the full fibre digital network that industry needs to embrace the 4th industrial revolution and comes hot on the heels of the National Infrastructure Assessment published last week. Manufacturers across the country have been investing in leased lines to get around the unreliable connectivity options in their area, but for those furthest away from fibre connections this has proven too costly to achieve.

“For manufacturers looking to invest in digital technologies to boost their productivity, today's announcement of an 'outside-in' strategy, which will see hard to reach rural areas prioritised first for government support, is a significant mark of progress. With Britain languishing against competitors on full fibre availability, the government should bring forward the required legislation to enact these changes swiftly to ensure UK manufacturers are not hindered in their attempts to boost productivity.”

Responding to the announcement, Evan Dixon, CEO, European Broadband Retail at Viasat Inc. said:

"The government needs to properly future proof the UK’s broadband infrastructure as a matter of urgency, and today’s investment is an admirable step in ensuring this happens. But 2033 is a long time away. What will the people in rural communities do today to get connected? As a country, the UK has become fixated on fibre to deliver broadband, blinding us to other ways of delivering internet. Providing a fibre connection outside of urban areas is challenging, disruptive to infrastructure, and incredibly expensive, as outlined by the additional £3-£5bn budget required to reach rural areas.

"We need a mix of technology to connect people now, or we risk showing off our full-fibre network in 15 years’ time when other countries may have already taken the next leap ahead. The government needs to be much more ambitious in providing better connections irrespective of technology, rather than relying solely on fibre. Without this variety, we risk further widening the divide by delaying rollout to other areas, creating a two-tiered nation of broadband haves and have-nots. This two-tier problem will have ongoing effects on education, opportunity and investment, creating a vicious circle where the gap between haves and have-nots keeps expanding."

On 5G Seth Wallis-Jones, principal research analyst, service providers and platforms, IHS Markit, and Kevin Hasley, head of product at RootMetrics, said:

"5G networks are due to start being deployed over the next year, and the target set is to “reach a majority of the population,” that is, over 50 percent by 2027. Over 80 percent of the UK population live in urban areas that will not stretch the operators, particularly as the Government has identified the 700MHz band to provide wide area coverage. In RootMetrics’ testing, we have already seen positive change in certain carriers offering network coverage that makes 80 percent more likely beyond just urban dwellers. For example, we have seen an 11 percent rise on average year-over-year on 4G coverage across all carriers. This helps sets the stage to offer 5G in more areas beyond just urban.

"Operators will welcome proposals to push forward planning reforms given the short ranges of higher-band frequencies that will open the throttle on 5G speeds but require network densification. 

"Operators will also, as always, welcome the promise of additional spectrum, and the flexibility to share spectrum. The implementation of network slicing in 5G networks has the potential to open up options for network management and competition regulation.

"Structured scientific measure of testing 5G networks is important to ensure that the infrastructure is to the right standards, before services are available."

On full fibre broadband, James Joiner, senior research analyst, service providers and platforms, IHS Markit, said:

"The IHS Markit Broadband Coverage in Europe 2017 Study, conducted on behalf of the European Commission, ranked the UK 26th out of the 28 EU member states in terms of full fibre coverage. The study showed that only 0.65 million UK homes had been passed by full fibre broadband at June 2017, as operators prioritized incremental upgrades to existing copper networks. However, with these incremental upgrades near completion, full fibre availability can be expected to increase in the UK. BT and TalkTalk, as well as Vodafone and CityFibre, have announced plans to accelerate deployment of full fibre networks, yet, no UK operator has committed to a mass rollout of the technology. As a result, the UK Government's aim to pass 15 million premises with full fibre broadband by 2025 currently appears an ambitious target.”  

The Future Telecoms Infrastructure Review (FTIR), announced as part of the government’s modern Industrial Strategy, proposes the changes that are needed to give the majority of the population access to 5G, connect 15 million premises to full fibre broadband by 2025, and provide full fibre broadband coverage across all of the UK by 2033. Full fibre infrastructure is vital to underpin 5G coverage.

At its heart is an emphasis on greater consumer choice and initiatives to promote quicker rollout and an eventual full switch over from copper to fibre.

DCMS Secretary of State, Jeremy Wright said:

We want everyone in the UK to benefit from world-class connectivity no matter where they live, work or travel. This radical new blueprint for the future of telecommunications in this country will increase competition and investment in full fibre broadband, create more commercial opportunities and make it easier and cheaper to roll out infrastructure for 5G.

The FTIR’s analysis indicates that, without change, full fibre broadband networks will at best only ever reach three quarters of the country, and it would take more than twenty years to do so. It also indicates that 5G offers the potential for an expansion of the telecoms market, with opportunities for existing players and new entrants.

Key recommendations from the FTIR include:

  • New legislation that will guarantee full fibre connections to new build developments;
  • Providing Operators with a ‘right to entry’ to flats, business parks, office blocks and other tenanted properties to allow those who rent to receive fast, reliable connectivity, from the right supplier at the best price;
  • Reforms to the regulatory environment for full fibre broadband that will drive investment and competition and is tailored to different local market conditions;
  • Public investment in full fibre for rural areas to begin simultaneously with commercial investment in urban locations;
  • An industry led switchover (from copper to full fibre) coordinated with Ofcom;
  • A new nationwide framework which will reduce the costs, time and disruption caused by street-works by standardising the approach across the country;
  • Increased access to spectrum for innovative 5G services
  • Infrastructure (including pipes and sewers) owned by other utilities such as power, gas and water, should be easy to access, and available for both fixed and mobile use;
  • Ofcom to reform regulation, allowing unrestricted access to Openreach ducts and poles for both residential and business use, including essential mobile infrastructure;
  • Alongside the FTIR, Government has also published a Digital Infrastructure Toolkit which will allow mobile networks to make far greater use of Government buildings to boost coverage across the UK.

The FTIR will drive competition and commercial investment in full fibre networks across as much of the UK as possible. However there will be some parts of the country where it will be unlikely that that the market will be able to deliver alone.

Nationwide availability of full fibre is likely to require additional funding of around £3 billion to £5 billion to support commercial investment in the final c.10% of areas. These, often rural areas, must not be forced to wait until the rest of the country has connectivity before they can access gigabit-capable networks.

The Government will therefore pursue an “outside-in” strategy, meaning that while network competition serves the commercially viable areas, the Government will support investment in the most difficult to reach areas at the same time. We have already identified around £200 million within the existing Superfast broadband programme that can further the delivery of full fibre networks immediately.

Sharon White, Ofcom Chief Executive, said:

We welcome the Government’s review, and share its ambition for full-fibre and 5G networks to be rolled out right across the UK. The Government and Ofcom are working together, and with industry, to help ensure people and businesses get the broadband and mobile they need for the 21st century.

Next steps

We will shortly publish consultations on legislative changes to streamline wayleaves and mandate fibre connections in new builds. The conclusions of the Review will also form the basis of the government’s Statement of Strategic Priorities (SSP) to Ofcom, setting out the strategic objectives and outcomes that the regulator must have regard to in the exercise of its regulatory functions.

The UK has only 4% full fibre connections and lags behind many of our key competitors Spain (71%), Portugal (89%) France (c.28% and increasing quickly).

Full fibre networks are faster, more reliable, and more affordable to operate than than copper-based networks. 5G will deliver faster and better mobile broadband, and enable new applications in industry sectors like manufacturing, health and transport.

The strategy seeks to recognise differences across rural and urban areas, and develops solutions that are tailored to both. The Review concludes that the best approach is to promote competition and commercial investment wherever possible, and to intervene only where necessary.

Market competition should deliver full fibre networks across the majority of the UK if we get the conditions right (c.80%). c.20% of the country is likely to require bespoke solutions to ensure rollout of networks. 5G is not just about faster mobile data connections, it could also deliver a wide range of new opportunities across industry sectors such as manufacturing, energy, transport and healthcare. The Government wants to encourage these new commercial opportunities through policy reforms, including making sure spectrum is accessible to all and used efficiently.

Running copper and fibre networks in parallel is both costly and inefficient, and a ‘fibre switchover’ strategy will be necessary to stimulate demand for fibre, to enable new networks to achieve scale quicker, and to ensure a smooth transition process for customers. The switchover process will be industry-led and timing will be dependent on the pace of rollout of fibre networks, and on the take-up of those networks. It is realistic to assume that switchover could happen in the majority of the country by 2030, but the timing will ultimately be dependent on the pace of fibre roll out and on the subsequent take-up of fibre products.

The EU’s new directive for electronic communications – the European Electronic Communications Code (EECC) - is currently under negotiation. It is likely to be ​adopted by the EU ​shortly. If adopted, we are minded to ​implement, where appropriate, the substantive provisions in UK law, on the basis that it would support UK’s domestic policy objectives. This will enable the extension of market review periods to five years and provide mechanisms to aid fibre network rollout in certain areas.

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