Brexit is killing full-fibre broadband and 5G roll-outs, says CBI

With the much-needed upgrade of the UK’s national broadband networks to gigabit full-fibre in full swing, and work beginning on the roll-out of 5G mobile networks, businesses large and small are chomping at the bit to upgrade their services. But Brexit presents an existential risk to the future of UK connectivity, and therefore the entire digital economy.

That is according to a new report from the Confederation of British Industry (CBI) which said Brexit is “sucking the oxygen out of priorities like this” and that if the broadband and mobile roll-outs stall, or even fail outright, UK businesses will miss out on huge cost and productivity benefits.

CBI chief UK policy director Matthew Fell urged the government to take practical steps to enable companies to adopt new connectivity technologies and close the productivity gap.

“There is a real risk that 2019 will be a year in which we overlook the rest of our economy,” he said. “There is already a digital divide in rural areas across the UK. Our ability to enjoy world-class digital connectivity should not be determined by where we live or work. It’s not just a social case for national coverage, but a clear economic one.”

Fell added: “Businesses have already invested heavily in digital infrastructure. In fact, the private sector will provide most of the £33bn total investment needed to deliver full-fibre networks across the UK. But the government must help firms to access those hard-to-reach areas.”

There are three main risks to broadband roll-out from a no-deal Brexit. Firstly, there are concerns that investment will dry up. Huge parts of the national full-fibre roll-out are being funded by venture capital outfits and if they decide to reduce their exposure to the UK in the event of no-deal, this may impact broadband investment.

Secondly, there are concerns that if the UK crashes out of the single market and customs union, the ability of network builders to import the essential equipment they need to roll out full-fibre will be damaged. BT is known to be stockpiling some networking equipment already to mitigate against this.

The third main concern is the availability of skilled broadband and network engineers to work on the roll-out. With many engineers and contractors having come to the UK from other European Union (EU) countries, there is a risk that this source will dry up, and those already in the UK may decide to return home.

Openreach has hugely increased its recruitment and training operation in the UK, but this effort is only now picking up and it cannot be known at this stage whether it will cover any shortfall in the event of no-deal.

The CBI is calling for the government to fast-track planned new legislation that will make it a requirement for new-build homes to have gigabit broadband “baked in”, and make it easier for network builders to access rented homes and those in multiple-occupancy buildings; to equip all new train lines and other transport projects with full-fibre cables; and do more to get businesses ready for 5G through awareness campaigns and highlighting testbeds and trials.

“There is no doubt that the UK is developing fantastic technology,” said Fell. “But right now, on the global stage, the race is on to ensure firms adopt it.

“This year must be a year of rapid uptake. First by extending support for businesses to help small firms adopt existing technologies like 4G and full-fibre, and second by expanding trials in new technology like 5G so businesses can explore the art of the possible with seamless connectivity. Digital connectivity is not just a nice to have – it’s a business basic.”

A spokesperson for Openreach said: “Our network will be the platform for productivity growth post-Brexit – enabling everything from online learning, e-health services and home working/start-ups. And our recruitment is creating careers for UK nationals. We hired 3,500 people last year and another 3,000 this year to build the network of the future. We’re also opening 12 training centres to make sure our people have the skills they need. 

“We’ve been working closely with government and business groups to prepare for any scenario that may affect our business, people and customers, and we have contingency plans in place, for example stockpiling of equipment and components

“We don’t expect Brexit to change how our customers access our high-quality, competitive products and services. And we’re here to support our customers as they develop their own plans,” said Openreach.

Mark Collins, director of strategy and public affairs at CityFibre, which is one of a number of companies spearheading the UK's full-fibre roll-out, said: “The CBI is right to warn of the digital and economic divide should swathes of the country miss out on the benefits of full-fibre.

“The biggest risk to delivering maximum coverage in the shortest possible time is that infrastructure builders deploy two or more full-fibre networks in the same locations. This inefficient and duplicative investment will double disruption in some areas, without any incremental benefit to their communities, while causing other towns and cities to miss out on investment altogether. We have a small window of opportunity to get this right.”