Chancellor of the Exchequer Philip Hammond has committed to invest over one billion pounds into Britain’s digital infrastructure
The chancellor has responded to calls from businesses for the government to invest into the digital infrastructure in today’s autumn statement (November 23).
Hammond (pictured) stated his desire for the UK to be “a world leader in 5G,” and will also offer 100 per cent business relief on investment in new fibre. Over £740 million has been committed to the development of 5G and £400 million to broadband fibre connections.
Ofcom will auction 190MHz spectrum in 2.3GHz and 3.4GHz bands, increasing the total mobile spectrum already available by nearly a third. Ofcom claims the 40MHz of spectrum to be auctioned in the 2.3GHz band can be used immediately.
The remaining 150MHz spectrum in the 3.4GHz band will be key to the rolling out of 5G services. Currently no consumer device can support this band of spectrum (5G).
In 2014 former London mayor Boris Johnson pledged to bring 5G to the capital by 2020, when announcing London’s first long term infrastructure investment plan.
Baby steps
The chancellor’s first post-Brexit speech was described as a “step in the right direction,” but the UK is unlikely to receive 5G services before 2020 according to CCS Insight CEO Shaun Collins.
“Any investment in the UK digital backbone is welcome and the commitment to 5G is admirable. However, realistically 5G services are unlikely to be available before 2020 in the UK. This investment only offers a small step in that direction.”
Around 35 per cent of the UK population still cannot access 3G which questions the government’s ambition to be a “5G leader”.
WorldRemit director Alix Murphy said: “Before investing in ambitious 5G technology plans, the government should prioritise spending this money where it matters most, on those 35% of Brits who are not even covered by basic 3G mobile broadband and struggle to get reasonable speeds.
“Though the UK claims to want to be a “leader in 5G”, in this investment the UK is actually behind a number of other countries that have already begun testing 5G technologies, most notably France, Turkey, China, India, Japan, the USA and South Korea.”
EY advisory partner Stuart Orr added: “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.”
Broadband more important than roads
Only two per cent of the UK population has access to fibre to the premises (FTTP), the fresh investment will focus on rolling FTTP out further in the country. FTTP connections offer up to 1Gpbs in download speeds, the national average speed is 28.9 Mbps, according to Ofcom.
With around £400 million to improve Britain’s broadband and 100 per cent business relief on investment in new fibre, the UK is heading in the right direction to being a ‘gigabit society’.
Collins said: “Incentivising investment in super-fast broadband brings the gigabit society a step closer. In an increasingly digital world this investment is even more important than the investment in roads, rail and other infrastructure for the UK.”
Orr added: “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.”
Gigaclear chief executive Matthew Hare agrees: “This sets the tone for helping Gigaclear to accelerate the rollout of great fibre up and down the country. The relief on business rates for those building new fibre infrastructure from April is, of course, welcome.”