5G investment could deliver £7bn a year to UK economy

5G investment could deliver £7bn a year to UK economy
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Making the UK an attractive place for investment in future 5G technology is essential if the country is to harness its full economic benefit, and not doing so could cost the economy up to £7bn a year, with towns and smaller cities set to miss out most in the current regulatory and policy environment, according to research commissioned by Vodafone UK.

The Vodafone digital ambition 2030 report shows that the benefits of full 5G – developing high-capacity, standalone infrastructure rather than building on top of existing 4G equipment – are enormous, especially for industrial uses such as smart factories, and public services such as hospitals, which will require ultra-reliable and ultra-low-latency communications.

However, the report stresses that all this depends on significant investment across all parts of the country, warning that the difference between an attractive and an unattractive investment environment will be worth £7bn a year to the UK economy by 2030 – most of which will be seen outside London and other major cities.

The biggest cities previously saw the fastest 4G roll-out and are now well positioned to attract investment in 5G, but smaller cities and medium-sized towns are at risk of missing out if the changes are not made quickly. The report identifies 58 local authority areas that would see a high or very high benefit from a good investment environment for 5G – and would fall further behind if investment continues to be limited to major cities. These are in every region of the UK except London, and include County Durham, Swansea, Midlothian, north-east Somerset, Pendle and Sheffield.

“5G technology enables both massive innovation and huge gains in productivity, especially for industrial uses such as smart factories, and public services such as hospitals which will require ultra-reliable and ultra-low-latency communications,” said Vodafone UK CEO Ahmed Essam.

“But the benefits of this will not be felt equally across the UK in the current regulatory and policy environment – we have to ensure the UK can attract investment in future technologies. 5G roll-out could be a major boost to the ‘levelling up’ agenda, but it could also leave some places falling further behind. It all depends on getting the investment environment right.

“As our research reveals, there is a £7bn-a-year difference between getting this wrong and getting it right. We want to see the whole of the UK – and in particular our smaller towns and cities – enjoying the incredible benefits that the 5G revolution can deliver.”

The report makes a series of recommendations to support investment in full 5G across the UK. It suggest the UK government should publish an updated 5G strategy that sets out specific ambitions for the roll-out of full 5G networks, underpinned by policy and regulatory reform which would enable these ambitions to be met, and that it should use its procuring power to create market demand in 5G-related services.

For example, the installation of smart energy management systems in all public buildings would reduce emissions in those buildings, expand interest in, and the market for, such systems elsewhere, and save money on energy bills.

Vodafone also called on the government to set planning rules in such a way that they do not stop 5G infrastructure being rolled out where it is needed and wanted, and with a business rates system that avoids deterring investment in high-value infrastructure.

In what could be a contentious demand, Vodafone called for net neutrality regulations enabling mobile operators to offer innovative products and services to customers and meet increasing demands on the network, making use of the full technological capabilities of 5G, and a change in approach to spectrum fees so that the money can be reinvested in network deployment.

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