EY: Coordinated action vital to meet Gigabit Britain network deployment targets

Even though improving UK gigabit infrastructure is essential to achieving post-Covid-19 growth and “levelling up”, meeting the UK government’s 85% coverage target by 2025 would, warns an EY report, require the UK’s current average “build rate for homes passed” – the rate at which properties are enabled on gigabit-capable networks – to increase by 85%, the equivalent of more than 10,000 homes per day.

The report includes findings from a survey of 2,000 small and medium-sized enterprises (SMEs) and shows that UK businesses are in support of funding being allocated to digital infrastructure. It outlines coordinated actions for government, regulators and service providers to work together to unlock Gigabit Britain.

Yet despite chancellor Rishi Sunak promising in his 2020 Spending Review to build a “stronger future” and transform the country’s communications infrastructure, the government’s ambitious previous £5bn plan for gigabit broadband coverage across the UK has now been watered down and investment levels cut.

Announced at the same time as the spending review, the National Infrastructure Strategy revealed, much to the annoyance of the UK’s broadband suppliers and trade bodies, that the government’s previous target of establishing nationwide gigabit broadband had been rolled back. The key changes being that the aim has changed from “gigabit broadband to every home” by 2025 to “minimum of 85% coverage” by 2025.

The budget of the plan remains at the £5bn set out as a manifesto commitment by the UK government a year ago, but only £1.2bn of that sum will be made available up until 2024.

EY’s report, Reset or level up. How can gigabit britain deliver for all?, found that that half of the respondents believe investment in gigabit connectivity is vital for the economic development of their region after Covid-19, and 48% added that gigabit connectivity would boost their business innovation. More than half (52%) said digital infrastructure was more important to them than physical infrastructure, with only 17% disagreeing.

Yet EY found that even to meet the revised target would assume that fibre-to-the premises (FTTP) would deliver the majority of new gigabit-capable connections going forward in the UK. It noted that galvanising demand for gigabit services and avoiding a return to a boom and bust era for UK telcos, will require several urgent actions to resolve critical barriers to user adoption.

These actions included building better gigabit awareness so that industry and regulators could work together to standardise fibre terminology and remove confusion for customers; creating better value propositions to stimulating gigabit broadband upgrade intentions and articulating what gigabit broadband can actually provide; ensuring switching is simpler; and enabling alternative paths for customers to upgrade.

In a call to action, EY said that over the coming months and years, supporting the UK’s ambition to close the digital divide and “build back better” from Covid-19 will be one of the most critical tasks facing government and businesses. It said now was the time for everyone to come together to ensure that Gigabit Britain delivers for all.

“While the revised timeframe is more realistic, for that remaining 15% of the population the risk of being left behind is greater than ever,” noted Praveen Shankar, EY’s head of technology, media and telecommunications (TMT) for the UK & Ireland.  “A lack of high-quality digital infrastructure in the regions will limit the opportunity to rebalance and grow the UK economy in years to come. Without equal opportunities to access digital technology, long innovation and social cohesion to support the long-term ‘levelling up’ agenda in the UK will be affected.

“Urgent improvements to the UK’s digital infrastructure are not only essential for businesses to grow and thrive, but they are also required to secure long-term national competitiveness. Without significant attention to gigabit infrastructure, the UK risks falling further behind European neighbours.”

To deliver the promised Gigabit Britain, broadband providers needed to underline the benefits of gigabit for businesses and consumers alike – clear terminology and a simple customer promise can help drive up demand, added Adrian Baschnonga, global lead telecommunications analyst at EY.

“Supply-side improvements are also essential, from optimising access and planning rules to creating more robust wholesale relationships within the industry,” he observed. “Crucially, the industry should recognise that this is a shared opportunity where proactivity and sustained collaboration is fundamental to success. Only by isolating key challenges and taking urgent actions to resolve them can the UK achieve its long-term digital infrastructure ambitions and unlock high-quality infrastructure for all users.”