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Gigabit broadband could add $50bn to UK economy – analyst

Assembly Research has estimated gigabit speed broadband services could add as much as $5 billion to the UK economy over the next five years.

Jamie Davies

April 27, 2020

3 Min Read
Broadband title pic resized

Assembly Research has estimated gigabit speed broadband services could add as much as $50 billion to the UK economy over the next five years.

While the UK has been making steady progress over the last five years in delivering full-fibre connectivity to households, it still lags behind European leaders. While accessing the cash to fund the rollout of these services, as well as 5G in parallel, will always be a difficult equation to balance, the legislative agenda is also an area which needs to be addressed.

“Access to reliable, future-proof digital infrastructure for all isn’t a luxury, but now accepted as a necessity whether it’s used for work, education or play,” said Matthew Howett, Founder of Assembly. “Increasing investment in key digital infrastructure will provide the bounce-back and economic recovery the UK will desperately need in the months and years ahead.”

While the UK could be said to be a leader in the 5G race, it is an also ran with a gammy leg in the broadband stakes. According to the FTTH Council Europe, the UK has only passed 15.1% of residences, significantly behind the likes of France (57.1%), Spain (85.6%) and Iceland (96.7%), but it has problems selling fibre connectivity also. Only 2.8% of UK households currently have a fibre connectivity contract.

This could be viewed as the polar opposite to 5G progress, as the UK was one of the first countries worldwide where all major MNOs had launched a 5G service, and deployment has been progressing very healthily.

Broadband is a very important aspect of the Gigabit Economy however, explaining the brash commitment by UK Prime Minister Boris Johnson in committing to a 2025 deadline for ubiquitous full-fiber coverage across the country. Although this acceleration is still laughable, there are a few areas of UK Government policy which could be addressed according to Assembly Research.

  1. Ensure sufficient funding exists for non-commercial areas if the whole country is to be covered and nobody is to be left behind

  2. A commitment to a technology neutral approach to reach the hardest parts of the country on time and in a cost-effective way

  3. Supporting market entry and expansion by alternative network operators, but recognising competition will vary by geography

  4. Making the cost of deployment as low as possible by addressing remaining barriers, which both increase costs and cause delays

  5. Ensure the demand side is given more attention to encourage take-up and help lower investment risk

What is important to note here is the technology-neutral approach to deploying the Gigabit Economy. This is a key consideration, as while fixed wireless access (FWA), the means to deliver broadband wirelessly, will not replace broadband there are usecases for deployment in the rural environment.

The issue with Government targets in the past is that they are technology-orientated not outcome-orientated. There is a valid argument that everyone will need gigabit speed connections at some point in the future, but it does not have to be delivered via fibre. It should be delivered in a cost-responsible manner which guarantees service quality, but this does not necessarily mean fixed broadband. A fixation on single technologies presents a problem, as it does not offer flexibility for companies who are under financial strain.

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