The UK Government Is Spending Big On Broadband In A Bid To Hit 95% 4G Coverage

The UK Conservative government has unveiled it budget and the best way to describe it is a that it is all to be big spending for the next year or so. The telecom and IT sector won’t be exempted from this as unveiled by the U.K. Chancellor Rishi Sunak on behalf of the Boris Johnson led government.

The Prime Minister and the party I dare to say made this a campaign issue so it was quite expected.  Breaking it down, £5b was earmarked for ‘gigabit-capable broadband in the hardest to reach places’, another £510m will go into the shared rural network and the aim according to the Chancellor is to achieve a 95 percent 4G geographical coverage by 2025 which is the expected lifespan of the current parliament. But UK telecom regulator OFCOM says the UK currently has an 84 percent 4G coverage so not only is the 95 percent coverage achievable from the look of things but no so ambitious after all considering the amount of money that will be spent on this for the next years. 

"If the country needs it, we will build it"—U.K. Chancellor Rishi Sunak sets out plans for record spending on infrastructure, including broadband, road and rail projectshttps://t.co/rVDzFT1964 #Budget2020 pic.twitter.com/YnHMZfbUGQ

— Bloomberg UK (@BloombergUK) March 11, 2020

The bigger issue here is the how the money will be spent to achieve this which is what many will be looking out for in the coming days and months. For example, how much of that money will go into fibre infrastructure and technologies like G.fast. That said, it is harder to reach some of the rural areas which may be the reason for the heavy budget to assist telecom firms in reaching some of these hardest reach areas according to the Chancellor but again, we wait to hear details of this.

In various reactions to the announcement as seen in telecoms.com, Mark Williams, Manging Director at Berkeley Research Group said in welcoming financial support from the government, “It’s the latest in a series of similar government initiatives going back several years. Ensuring ubiquitous mobile network coverage in the UK is challenging for both technical and financial reasons. The challenge for the government and for Ofcom is to ensure that this public funding is used quickly, efficiently and does not replace private investment that the operators would have made anyway.”

Maziar Nekovee, Professor of Telecoms and Mobile Technologies and Head of Centre for Advanced Communications, Mobile Technology and IoT at the University of Sussex said “Getting the four operators to work together to improve rural coverage is a very sensible approach from a consumer perspective and a significant step forward considering operators were previously reluctant to network share.” That said, the professor doesn’t think the government should stop there and added that “it is disappointing that instead of pushing operators to take advantage of this arrangement to bring 5G to the whole country, the Government is focussing on 4G coverage. The danger is that we will see a new digital divide emerging with cities benefiting from 5G’s higher speeds and other benefits that 5G offers  for  health and care, agriculture, autonomous driving, while rural areas are stuck with 4G, with no incentive from operators to upgrade to 5G and also little room for regional companies to fill in the gap. In short, the result could be that while the 4G not spots will disappear, they will simply become 5G not spots instead.”

Kevin O’Donnell, European Business Manager at Viavi said “The UK’s broadband connectivity has really needed a shot in the arm for some time, in terms of the percentage of population with access to Gigabit internet, the UK is in thirtieth place globally, according to our own research. The UK has been punching well below its weight. Currently, only around 11% of the British population have access to Gigabit speeds. The country lags behind nations such as Moldova, Qatar and France.”

So other big investments include road and rail transportation projects across Britain but perhaps the biggest announcement was a £30b financial stimulus package to enable the UK to manage the coronavirus issue which is hitting industries like travel and leisure really hard. This and the cutting of interest rates by 0.5 percent by the Bank of England is expected to help small businesses access short term loans easily.