UK business suffer as targets for fast broadband probably won’t be met.
Smart solutions waiting to roll, but restricted bandwith hampering implementation, and restricting UK’s competitiveness
According to a London School of Economics report, the UK government’s basic broadband target of 100 percent coverage by 2015 probably will be achieved.
However, the government also declared a goal of 100 percent access to “fast” broadband and 90 percent access to “superfast” broadband (at least 80-100 Mbps) by 2015. The report, commissioned by Convergys Smart Revenue Solutions says these targets probably won’t be met. The government’s broadband programme needs £2.4 billion to meet the targets but has only £1.3 billion in public funding, meaning that private investors will be expected to make up the difference.
The report notes that increasing broadband penetration by 10 percent can increase gross domestic product by as much 1.5 percent per capita.
“This paper shows that serious investment in broadband can deliver serious social and economic benefits for the UK,” said Morag Lucey, Global SVP Marketing, Convergys Information Management. “Yet, the current funding gap of £1.1billion means that we’re likely to remain uncompetitive in Europe, let alone the rest of the world, until we find some way of bridging this infrastructure shortfall. We believe operators should not be pressurized to fulfill this gap, as they already face tough market conditions. Yet we see smart solutions taking some pressure off operators; with a more advanced broadband infrastructure, smart solutions can help boost revenues as operators evolve to next-generation solutions in the future.”
The paper suggests that innovation in telecommunications can generate significant savings and revenue increases. These financial returns can help stimulate the industry and provide a better economic outlook, if the funding gap identified for superfast broadband is plugged and Government targets met.
Core to this innovation is a focus on smart solutions and the role they can play in increasing the take-up of broadband services, greater usage and additional revenues. ‘Smart solutions’, such as billing, customer care and real time charging and policy solutions, can for example, give service providers unprecedented insights into customer behavior. These insights allow providers to tailor service offerings that improve the customer experience in line with their demands and pricing expectations, ultimately generating greater revenue and reducing ‘churn’.
“Our new paper shows that there is much the UK can gain from deploying fast broadband, but there is much still to be done to make it a reality,” said Dr. Paolo Dini, Senior Research Fellow, London School of Economics. “Investment is clearly one challenge that needs to be overcome, but so too is encouraging further use of broadband and take-up among customers. The study argues that smart solutions will help provide the insights that operators need to improve service offerings that drive greater use, not to mention the commensurate cost increases and efficiencies that are also generated.”
Meanwhile, the government’s vision is creating “Tech City” in east London, touted as a gathering place for high tech companies to rival California’s Silicon Valley. Officials talk about creating the conditions necessary to grow and develop the next Facebook, Google or Oracle.
Indeed established tech companies such as Cisco, Intel, Google and Facebook have already moved into Tech City or plan to do so but the long-sought startups, which the superfast broadband would help develop, remain elusive.
The UK’s Culture Secretary Maria Miller said in September, “The government means business and we are determined to cut through the bureaucracy that is holding us back.”
She noted that “superfast broadband” is key to increasing economic growth yet planning and other governmental red tape is hampering the effort. Proposed changes include faster approvals for telecom companies to cut up streets and install high-speed cable.
Two years after the launch of the Tech City initiative, Intel, Google, Cisco, Vodafone, Airbnb and Yammer have invested capital. Facebook is opening its first engineering campus outside of the U.S. The number of tech companies in the area has increased an estimated five-fold. However, the East London tech hub generally is regarded as still a work in progress and it is reported that startups in the area have had difficulty getting providers to hook them up.
Full paper at: www.convergys.com/smartrevenue/lse