09 March 2017
| James Pearce
The UK government has pledged additional funding for fibre broadband and 5G deployment, but is set to hit mobile users with additional charges for roaming outside of Europe.
During its latest budget, chancellor Philip Hammond
committed £16 million in state funds for a National 5G
Innovation Network, which will partner with research
institutions to develop projects around the next generation of
A number of organisations within the UK are already driving
5G research, including BT, which has partnered with Huawei to
test 5G advancements, and the University of
Surrey’s 5G Innovation Centre. The latter received
£12 million in funding and is backed by operators
including Telefonica, Vodafone, and BT-owned EE.
The latest commitment pales in comparison to
Hammond’s previous financial statement in
September when he announced funds of £750 million would
be made available for 5G projects.
Some within the industry questioned the low investment
figure in 5G, given previously stated ambitions to make the UK
"a leader" in 5G connectivity.
Sally Mewies, partner at Gowling WLG, said: "The
announcement of a £16 million investment in 5G does not
feel like a significant sum of money particularly when George
Osborne had the ambition for the UK to lead the way in 5G
technology and is likely to be very important to the autonomous
car sector. Having said that, there are clearly benefits to the
announced investment in a mobile hub at research
"Irrespective of the investment, many large players in
the Telecoms sector view the UK’s planning laws as
one of the biggest barriers to the 5G rollout. Until that is
resolved, roll out of this technology at pace will be
challenging and not just in London."
"5G has the potential to transform the UK economy, modernise
industry and support the fast-growing digital social space so a
bold and long-term strategy from Government is vital.
"But it’s important to stress that the 5G
investment announced today will not come anywhere close to
bridging the investment gap needed to deliver 5G across the UK
- so the Government strategy’s recognition that
regulatory modernisation is needed to make the final bill of
delivering 5G more affordable, for example by enabling
operators to share networks, is pivotal.
"The biggest challenge for Government will be
improving coverage for all, as 5G cannot transform what it
doesn’t cover. And achieving universal coverage
for the UK, outside high-capacity urban areas, will not be
affordable or achievable without regulatory change."
Hammond also announced £200 million in funding for
"full fibre", which is understood to mean fibre to the home,
deployment, which will be driven by the Broadband Delivery UK
programme. This aims to deliver "superfast" broadband (speeds
of above 24Mbps) to 95% of UK homes by the end of this year,
and 97% of homes by 2020.
In his autumn statement, Hammond also committed £200
million towards fibre broadband funding. This followed on from
predecessor George Osbourne’s commitment of the
same figure, £200 million, in fibre funding as part of
last year’s budget.
Lee Wade, the CEO of UK-based cloud provider Exponential-e,
said more needs to be done to address concerns around the
UK’s network infrastructure.
"Today's budget from the Chancellor was a start, but it
still does not go far enough to address the network
infrastructure of the UK. Yes, we have seen £200 million
has been set aside to help deliver broadband across the
country, but more still needs to be done.
The inability to constantly modernise Britain's network
infrastructure is not just a matter of being bottom of the
It's also a major bottleneck to the progress of business and
our increasingly digital economy."
It wasn’t all good news for the industry,
however, as Hammond announced additional costs for those using
their mobile phones while abroad.
In his Budget speech Hammond told the House of Commons his
budget plan contained measures "to introduce UK VAT on roaming
telecoms outside the EU in line with international standard
The European Union is set to introduce free roaming across
all member states, including the UK, later this year, so
Hammond exempted EU roaming from the charges. However, it
remains unclear what impact the UK’s decision to
leave the EU as part of last year’s referendum
will have on roaming in the future.
The charges could negatively impact the industry, as VAT
charges are paid directly to the treasury, and roaming is
already charged at a premium in some countries. This could mean
consumers are less likely to use their phones while abroad.
5G Innovation Centre,