Budget 2020: New investment in broadband and 5G infrastructure

On 11 March 2020 the new Chancellor Rishi Sunak unveiled the first budget of the new Government. Along with a fiscal package to help mitigate against the economic and social costs of COVID-19 the budget also contained a large number of announcements for the tech sector.

Over a series of insights we will dive deeper into what the budget means for data, green tech, digital infrastructure, R&D and competition and regulation.

The noises from the new Government, culminating in the commitments made in the Budget reaffirmed the Government’s understanding of the role that connectivity plays in the digital economy.

The Budget confirmed investments of £5 billion to help people access gigabit-capable broadband in the most difficult to reach areas of the UK, along with up to £510 million to extend 4G mobile coverage to 95% of the UK, as part of the £1 billion industry-led Shared Rural Network. These investments are all welcome as Government and industry work together to meet the 2025 deadline.

Shared Rural Network

techUK supports the Government’s on-going commitment to delivering gigabit-capable broadband and to extending 4G coverage across the UK. The Shared Rural Network will be benefit people across the UK in rural areas and help to deliver strong 4G coverage across the four main Mobile Network Operators by the end of 2025. These improvements will be felt most strongly in rural parts of Scotland, Northern Ireland and Wales where coverage is likely to increase by more than a third.

Outside-In Approach

BDUK are also committed to future proofing connectivity, with a £5 billion commitment from the Chancellor to fund gigabit-capable deployment in the hardest to reach 20% using the ‘Outside-In’ approach.

The Outside-In approach will run for up to 9 years, with contracts being awarded from 2021. Contracts are expected to average about 3300 premises, which BDUK believes might constitute a “neighbourhood." In many rural areas 3300 premises could represent a large neighbourhood, and more than one Openreach spine. BDUK is intending to look at complete neighbourhoods, not seeking to identify individual “rural” premises. It is confident that it will be able to identify areas with a high proportion of hard to reach properties, (whilst avoiding splitting up neighbourhoods) from which it will then remove those reached, or planned to be reached commercially, by gigabit capable technologies. Contracts will include a mix of hard, and harder, to reach premises.

New Build Development

Additionally, this week Government announced new legislation requiring new-build homes come with gigabit-capable broadband fit for the future. This is a substantial step in the government’s plan to level up the UK and accelerate the nationwide rollout of world-class broadband. This will also allow people to work from home more easily and will give homes fast and reliable connections for streaming TV and films on multiple devices at the same time whilst helping to ensure they are ready for any future technologies which require faster broadband speeds.

Given that Government research suggests that one in five new-build homes are still being built without gigabit-capable connections, mostly in smaller developments, where the cost can be higher, or network operators have not had the time they need to build in connections before completion, this is a welcome step. You can read techUK’s comment on the announcement here.

 

Ultimately, meeting the ambitious and challenging goals for nationwide connectivity by 2025 will require all network builders to accelerate the pace of their deployment. The £5 billion budgetary commitment in support of all those prepared to take on this challenge is welcome but needs to be accompanied by a range of policy and regulatory enablers. Critical to the success of the BDUK programme will be the establishment of a very clear roadmap for public funds, accompanied by simple and effective mechanisms which encourage competitive and credible bids. Above all, the allocation of the £5 billion needs to be focused in the strictly non-commercial, hardest to reach areas ensuring that sufficient funding goes to the areas which need it most and where it can make the biggest difference.

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