Budget offers £10bn for telecoms

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Chancellor Alastair Darling’s Budget announcement this week has been met with mixed reactions from the telecoms industry. Some groups have praised the £10 billion set aside for the communications sector, and others have said infrastructure commitments spelt out so far aren’t enough to provide true universal broadband access.

Delivering the Budget on Wednesday, Darling said the Government would aim to deploy broadband speeds of at least 2 Mbps across every UK household by no later than 2012 and invest more in pushing broadband take up. It will also conduct a review of the powers and duties of industry regulator Ofcom.

The Budget also confirmed that approval has been given to establish a ‘Digital Region’, which will take the form of a £100 million project to implement next generation broadband services in South Yorkshire, led by regional development agency Yorkshire Forward.

NEC Europe head of broadband access Simon Webster said the Budget’s allowance for communications development was “a step in the right direction”, but would still leave gaps of inequality: “Will the commitment to 2Mbps really do the job? The way broadband is set up today, you can get as much as 8Mbps or as little as ½Mbps depending how far your house is from the local exchange.

“Globally, we can see three classes of broadband citizen: the first class is in areas like Japan and South Korea, where Fibre to the Home (FTTH) technology ensures equality of service for all. The second class has widespread access to high speed DSL, which can provide as much as 24Mbps, and we in Britain fall into the third class, where many service providers are limited to 8Mbps. Both the second and third class broadband citizens are held to ransom by the distance of their homes from the local exchange and there can never be equality until we see ubiquitous FTTH.”

Ovum senior analyst Matthew Howett also questioned the 2mbps universal service commitment.

“While the Government’s commitment to a 2Mbps universal service obligation for broadband is a big step up, other nations are formulating plans for deploying speeds in excess of 50mbps, and it is this scale and ambition that was lacking from the Budget announcement.”

 

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