Home
 » ISP News » 
Sponsored

Superfast Broadband and 4G Mobile Benefits to UK Economy Exaggerated

Wednesday, October 31st, 2012 (7:55 am) - Score 1,024
uk fibre optic fttc cable

The Economist Intelligence Unit (EIU) has published a new Huawei sponsored study that says “a good dose of reality” is in order as it questions whether the new fixed line superfast broadband and 4G mobile solutions can really deliver the “sizeable boost to GDP growth” and job creation, which are so often touted by the UK government.

Research from consultancy firm McKinsey suggests that the Internet accounts for over 5% of the UK’s GDP (possibly as much as 7%) and the Boston Consulting Group last year predicted that this could rise to 13% by 2015, which would take place alongside the current plan to boost broadband speeds and coverage to 90% of UK people by March 2015.

uk_jobs_from_gbp5bn_broadband_boost

But the EIU report, which is based on a “thorough review of existing research” as well a series of in-depth interviews conducted with 19 industry experts and policymakers, correctly cautions that superfast broadband will deliver growth, jobs, better education, public services and healthcare improvements but probably not to the level expected.

The EIU Report said:

Will this next generation of connectivity, however, with its blazing speeds, continue to deliver prosperity in the same way that previous leaps have? The central argument of this report is that, while the gains from significantly faster connectivity will indeed be sizeable over time, a good dose of reality is also in order. Existing networks are capable of delivering many of the services anticipated over the next few years.

Obstacles are also numerous to utilising even the existing technology capabilities to good effect, including a shortage of skills and resistance to change. In this context, some of the expectations about the early returns from superfast broadband rollout in the UK may be overstated.”

The report goes on to warn that “it is difficult to see” how the impact of faster services with better coverage will “match that resulting from the earlier switch from dial-up to broadband Internet”. Indeed, as has been discussed many times before, it probably won’t match because superfast services are more of an evolution than a revolution in how we connect to the internet.

On top of that superfast services are often more expensive and the current plans typically focus on improving connectivity in areas that usually already have reasonable or good connections. As a result superfast services can end up in competition with existing and cheaper standard broadband packages, which is a tough market to crack.

The EIU Report said:

In the near term, ensuring pervasive Internet access to all parts of society—rural users, the elderly and others—will be at least as beneficial to society as a whole as upgrading to superfast broadband.”

Telecoms providers and ISPs will also need to spend a significant amount of money on development of the new networks, with BT expected to spend a total of £3.5bn (£2.5bn from private funding). A further £1bn or so will come from the government’s Broadband Delivery UK (BDUK) office, which is expected to be match-funded by local authorities and the private sector. Further cash from the EU is also likely. In terms of private investment alone it could, in some cases, take around 10 years to earn this back.

However, in order to stay competitive, such work is now more of a necessity for ISPs. The real area of change will come from connecting those whom would otherwise be left out in the cold with slow or unreliable connections.

According to the EIU report, a short-term boost to jobs is inevitable (especially among telecoms engineers), yet the “creation of jobs in some industries and regions may very well be partly offset by job losses elsewhere“. Wider reforms of the health system itself are also called for and “a shortage of [IT] skills” must be similarly addressed to help deliver on the full benefits.

Superfast Britain? Myths and realities about the UK’s broadband future
http://www.managementthinking.eiu.com/superfast-britain.html

Add to Diigo
Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
Leave a Comment
4 Responses
  1. This is exactly what grassroots people have been saying for years. It is also highlighted in the House of Lords report. It makes far more sense to get broadband which is fit for purpose to rural areas and help every citizen have the chance to be digital than to patch up the old phone networks to help a few go faster. The whole job will be to do again in a few years once governments realise this. We need a good fibre infrastructure everywhere, not just in the exchanges and cabinets in urban areas where the profit is.

    • Avatar FibreFred

      But the house of Lords report was ridiculed for what it was, complete rubbish.

      And its not “all to do again” as has been said many times before

  2. Avatar FibreFred

    Totally agree on this, this isn’t the one thing to kick start the economy, foolish to believe it

  3. Avatar Mike

    What Name were you supposed to use to agree with yourself there?

Comments RSS Feed

Javascript must be enabled to post (most browsers do this automatically)

Privacy Notice: Please note that news comments are anonymous, which means that we do NOT require you to enter any real personal details to post a message. By clicking to submit a post you agree to storing your comment content, display name, IP, email and / or website details in our database, for as long as the post remains live.

Only the submitted name and comment will be displayed in public, while the rest will be kept private (we will never share this outside of ISPreview, regardless of whether the data is real or fake). This comment system uses submitted IP, email and website address data to spot abuse and spammers. All data is transferred via an encrypted (https secure) session.

NOTE 1: Sometimes your comment might not appear immediately due to site cache (this is cleared every few hours) or it may be caught by automated moderation / anti-spam.

NOTE 2: Comments that break our rules, spam, troll or post via known fake IP/proxy servers may be blocked or removed.
Cheapest Superfast ISPs
  • Hyperoptic £21.00 (*25.00)
    Avg. Speed 50Mbps, Unlimited
    Gift: £50 Shopping Voucher
  • TalkTalk £21.95 (*36.00)
    Avg. Speed 38Mbps, Unlimited
    Gift: None
  • Post Office £22.90 (*37.00)
    Avg. Speed 38Mbps, Unlimited
    Gift: None
  • Direct Save Telecom £22.95 (*29.95)
    Avg. Speed 35Mbps, Unlimited
    Gift: None
  • Onestream £22.99 (*34.99)
    Avg. Speed 35Mbps, Unlimited
    Gift: None
Prices inc. Line Rental | View All
The Top 20 Category Tags
  1. BT (2528)
  2. FTTP (2244)
  3. FTTC (1670)
  4. Building Digital UK (1615)
  5. Politics (1442)
  6. Openreach (1427)
  7. Business (1255)
  8. Statistics (1108)
  9. FTTH (1099)
  10. Mobile Broadband (1053)
  11. Fibre Optic (977)
  12. Ofcom Regulation (922)
  13. Wireless Internet (917)
  14. 4G (916)
  15. Virgin Media (867)
  16. EE (601)
  17. Sky Broadband (598)
  18. TalkTalk (583)
  19. Vodafone (530)
  20. 3G (416)
Promotion
Helpful ISP Guides and Tips
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
Sponsored

Copyright © 1999 to Present - ISPreview.co.uk - All Rights Reserved - Terms , Privacy and Cookie Policy , Links , Website Rules , Contact