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kerryritz

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The future of telephony

Campaigning for change in the UK telecoms industry in order to create true competition and a platform for innovation.

Tuesday 15 January 2008, 5:35 PM

Plea to bring British Broadband out of the Dark Ages

Posted by kerryritz

The British car manufacturing business is as good as dead, more and more of our call centres are moving overseas and Britain's oil production peaked in 1999 and has already dropped by half. Over the years what we saw as traditional UK industries and businesses have suffered but we don’t need to fret because the future is all about IT and we’ve got that covered. Haven’t we?

Well actually no. According to sector skills body e-skills UK dwindling numbers students taking IT-related exams could pose a serious threat to the UK’s future competitiveness. In addition, despite the rapidly growing number of broadband users, the UK recently came a rather dismal 9th out of the Information Technology & Innovation Foundation's (ITIF) European league table for broadband speeds.
IT qualifications are important but I’m also a firm believer in learning on the job so as a longstanding member of the telecoms industry, it is the latter of these two facts that astounds and concerns me the most.

ITIF results showed an average UK broadband speed of just 2.6Mbps, which compares with 21.7Mbps for top European player Finland. Looking further a field doesn’t paint a rosier picture either. In Japan broadband connections are hovering around the 100Mbps mark!
How can we compete? It’s quite simple really, we need to upgrade to a much faster fibre optics system. The catch? Cost of course. It is estimated that this upgrade with require a £15bn investment. BT doesn’t want to pay it and see its profit margins suffer and as they dominate the UK telecoms space, there isn’t really anyone else who could foot the bill.

Unless you consider the government as an option; pretty quick to take £22bn off the mobile operators for their 3G licences back in 2000 and more recently quick off the blocks to prop up Northern Rock with a cool £25bn. In comparison £15bn to help secure the UK’s competitive position in the Global economy seems like chicken feed.

In many ways it’s no longer an either/or choice i.e. private or public, it's about looking at models that will work for the UK but decisions need to made quickly. If nothing is done, it will end up just like our road system and we’ll get stuck with the broadband equivalent of A-roads (or worse) while the rest of Europe builds high speed motorways.

On a plus note, if that is the case, I guess the economical implication will mean our road situation matters less. After all, who really cares about the state of the road when you can only afford to drive a Vauxhall Vectra? High speed super cars will be exclusively for our more successful European counterparts to enjoy - on their high speed motorways of course!

Comments on this post

Armando

I think BT have accepted its their duty to move this forward - they are expected to introduce a fibre network this year in Kent - http://shopping-information.blogspot.com/2008/01/high-speed-broadband-take-broadband.html
I'm certain they will find a way to cover and recoup the colossal costs involved

Posted by Armando on Jan 16, 2008 10:09 AM

James B

I would not be so sure BT are willing to foot the bill. They have had their fingers burnt by LLU - a trend that has seen a signficant decline in the revenues of their BT Wholesale division, hence they will be unwilling to invest in a high speed network only to see the regulator force them to share access. This kind of logjam is a key downside to the open, competitive market we have grown used to.

The Ebbsfleet example is good, but it is largely a proof of concept, I think the public option is the best alternative. The 3G licence auction is a good example and a similar approach should be adopted for the next generation of high speed networks.

One thing is certain - a high speed network should be a case of when not if.... the how is the tricky bit....

Posted by James B on Jan 16, 2008 2:50 PM

kerryritz
  • kerryritz
  • Executive Management, London, UK
  • Member since: December 2007

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