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Telecoms – opportunities and challenges for the sector in 2019

Investment in modern network infrastructure is crucial to supporting the UK's digital economy and is central to regulatory policy as the government seeks to enhance the UK's position as a well-connected market in a post-Brexit world. At the same time, the UK regulator seems set to maintain a tough approach to enforcement of key consumer protections.

December 2018

Implementing a new broadband right

Earlier this year, the government passed legislation introducing a new Universal Service Obligation (USO), with the aim of addressing rural coverage issues by guaranteeing the availability of affordable broadband services throughout the UK. By 2020, consumers and businesses will have the right to request a broadband service with minimum download (10Mbps) and upload speeds (1Mbps). It is expected to benefit 925,000 premises in the UK.

Ofcom has been consulting with the industry on how to implement this new regime and it is expected to move forward in 2019, with the appointment of designated providers responsible for delivering on the USO in specific regions.

Fibre is key

While the USO is technology neutral (and is likely to involve satellite communications for the most remote rural areas), fibre networks are a critical part of the UK's national infrastructure.

We expect to see continued commercial investment in fibre networks including investment in metro networks by smaller operators such as City Fibre and Hyperoptic. New regulations, which allow alternative providers to use BT's ducts, will no doubt facilitate further roll-outs.

The government is also supporting fibre investment through schemes such as the Local Full Fibre Networks programme which has launched a £190m Challenge Fund, of which £95m is still available for new locally-led connectivity projects.

Mobile coverage

Improving rural coverage remains a focus for policy makers and a cross-party report in October recommended a number of measures.

Further spectrum in the 700MHz band which is suitable for 4G and 5G services will be auctioned in 2019, and the licences are likely to include stricter coverage commitments.

Network innovation will also be driven by industry innovations such as the programme Facebook and BT have launched to fund network technology start-ups (see here).

5G will require significant infrastructure

Commercial roll-out of 5G by 2020, will require significant infrastructure investment in the coming year. The scale of investment involved will be huge, the characteristics of 5G services and the spectrum involved will require operators to install a significant number of new masts. We will begin to see different commercial models with land and facility owners in relation to these installations and operators are also keen to see a relaxation of planning laws to encourage this investment. 

Regulators are also focused on protecting consumers

While much of regulatory policy is focused on encouraging network investment, consumer protection remains paramount. Ofcom has proactively enforced key protections in areas such as emergency service access, dispute resolution and switching. The regulatory regime applies to a broad range of communications providers, including OTT players, and providers should assume that Ofcom will continue to take a tough line on enforcement.

Connected car projects in the UK will continue

The largest trial of automated vehicle (AV) technology in the UK came to a close in October 2018 and revealed that connectivity, in particular the new opportunity that 5G connectivity affords, is key to making automated vehicles a reality in the UK. Groups such as the 5G Automotive Association (5GAA) are working to secure a stronger relationship between the automotive and IT industries. 5GAA's recent position paper indicates just how important 5G connectivity and integration will be in order to enable Cellular Vehicle-to-Everything technology to flourish (see here). 2019 will see further consultations on AV regulation and opportunities for the testing of AVs in the UK, prompting discussions on connectivity and next steps for regulators.

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broadcasting arials
Angus Finnegan

Rachel Wiltshire

Rachel Wiltshire


Angus and Rachel look at sector 'hot spots'.

"We expect to see continued commercial investment in fibre networks including investment in metro networks by smaller operators."