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5G rollout delay could cost the UK billions

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The government's 'levelling up' agenda and national economic recovery for the UK are both at risk if the 5G rollout veers off track, according to a report from the Centre for Policy Studies.

In July this year, the UK telecoms industry announced the launch of 'Speed Up Britain', a campaign calling for the government to reform the Electronic Communications Code legislation that was intended to assist the rapid deployment of mobile infrastructure.

Now, the Centre for Policy Studies (CPS) has launched a report titled ‘Upwardly Mobile: How the UK can gain the full benefits of the 5G revolution’, in which former government advisers Alex Jackman and Nick King argue that the government’s ‘levelling up’ agenda and the UK’s recovery from the Covid-19 pandemic are both at risk without a faster 5G rollout, potentially costing the UK £41bn in lost opportunity.

Using analysis by independent consultancy Policy Points, the report estimates that if 5G coverage reaches another quarter more of the population than the government’s current target of 51 per cent, it would produce GDP gains of £41.7bn by 2027.

The report highlights that the difference between the UK being a leader and a laggard in 5G adoption could be as much as £173bn in incremental GDP over the coming decade, as estimated by the Future Communications Challenge Group.

The delivery of 5G infrastructure faces many challenges, including unclear legislation, disruption to the 5G equipment supply chain and new demand challenges posed by the Covid-19 pandemic. Targeted amendments to the government’s Electronic Communications Code could speed up the 5G rollout and provide a boost to the UK economy.

The report's authors believe that a faster 5G rollout will help drive a stronger UK recovery and provide an essential tool to ‘level up’ the regions. Without action from government, over 11 million households and businesses could see delays in receiving the mobile connectivity they need. The next few years are considered critical for economic growth and recovery and that immediate action is needed to capture the full benefit from this vital new technology.

Jackman and King claim that the delivery of 5G infrastructure is stalling and that the set of rules meant to pave the way for the smooth rollout of the next-generation telecommunication network, the Electronic Communications Code, is not working as intended. Pressure on the rollout is expected to increase with the phasing-out of Huawei from 5G infrastructure by 2027.

The report suggests that if delays continue at their current rate, by 2027 over 11 million households and businesses could be missing out on vital digital connectivity. Improving digital infrastructure supports the government’s ‘levelling up’ agenda, by helping local areas to retain and attract businesses and talent as well as by reducing regional inequalities. However, without reform to existing legislation, millions of households and businesses will suffer.

The manufacturing, construction and agricultural sectors have been hit particularly hard by the pandemic and these would benefit significantly from improved connectivity. However, onerous planning rules and loopholes in existing legislation are slowing down the infrastructure upgrades needed to make the most of this mobile revolution in these much-needed industries, the report claims.

To overcome these deployment barriers, Jackman and King have called for urgent reforms to the Electronic Communications Code and national planning rules to speed up the rollout of 5G, unlock its potential and stimulate growth as the country recovers from the economic impact of Covid-19. It calls for sustained public sector leadership to deliver this, recognising that supporting digital infrastructure is one of the key things the government can do that costs little, boosts growth and helps ‘level up’ the UK.

The report warns that without such efforts, the UK could miss its 2025 deadline for gigabit connectivity and 2027 target for 5G coverage, putting the potential economic gains at risk. It argues that policymakers must learn from the 4G rollout and remove the barriers to deployment. While 5G promises to create economic benefits through increased capacity, reliability and speed – vastly improving business productivity and removing barriers imposed by poor digital connectivity – the system is plagued by red tape.

Jackman said: “Digital networks and the services they support have underpinned our resilience to Covid-19 and they will drive our recovery. By expanding them, we deliver not only immediate benefits but also the essential foundation stone for 5G. This is no time for the government to be passive on the deployment environment – the difference between the UK as a 5G pioneer and ceding leadership to others is as much as £173bn.

“Productivity gains to business, equality gains for regions and economic gains for the country are only as achievable as the networks we can access.”

The Rt Hon Patricia Hewitt, chair of the 'Speed up Britain' campaign, said: “There aren’t many low-cost ways to unlock serious economic growth, but small changes to the Electronic Communication Code could unlock billions of pounds in our economy, drive the UK’s Covid-19 recovery and deliver significant regional growth.

“All parts of the UK can benefit from this fantastic technology – but the government needs to act now to avoid being left behind in the digital revolution.”

Responding to the report, Matt Warman, minister for digital infrastructure, said: “It is our national mission to futureproof the UK’s networks with revolutionary 5G technology. Thanks to government and industry action, 5G is available in more than 70 towns and cities.

"Alongside record amounts of funding, we are exploring how to bust any barriers holding back industry from speeding up rollout. We've committed to reforming planning law and to consult on whether further reforms to the Electronic Communications Code are needed and will consider the points raised in this report carefully.”

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