Matthew Howett, an analyst at Assembly, said the Government's new pledge “will play well into Virgin's hands given their mix of technologies”.
He added: “The only way Boris’s 2025 target for nationwide full fibre coverage had the slimest chance of success was for it to be fudged to include Virgin’s network.”
Huawei Vice President Victor Zhang said in a statement Monday evening that the government review “gives us confidence that we can continue to work with network operators to roll out 5G across the U.K.”
Based on discussions with three of the U.K.’s four carriers, analyst firm Assembly estimated in April that restrictions on the use of Huawei could delay the 5G roll-out by between 18 and 24 months, resulting in a 4.5 billion pounds ($5.6 billion) to 6.8 billion pound hit to the U.K. economy.
The consultancy Assembly suggests a partial to full restriction on Huawei could result in an 18-to-24-month delay to the widespread availability of 5G in the UK. The UK would then fail to become a world leader in 5G – a key government target – costing the economy between £4.5bn and £6.8bn.
“If we had banned Huawei and everyone was just using Ericsson, we would have had a day without any mobile coverage on any network – not a good position to be in,” said Matthew Howett at Assembly.
“There is the whole debate about where the core and access network are delineated,” said Howett. “But the reality is that the operators are all using Huawei to an extent – they are quite happy with it. The government has huge ambitions for what 5G can deliver to the economy, and a bad decision based on politics could seriously stop that from being a reality.”
"They really need to attract investment funds to make sure the tech sector keeps growing," said Luca Schiavoni, a digital regulation analysts at Assembly Research, a consultancy firm in London. "But at the same time, it's really difficult to run into someone in Westminster who believes the tech sector doesn't need more regulation."
Matthew Howett, a mobile analyst with research firm Assembly, said: "To convince consumers to make the leap from 4G to 5G, it's important to communicate that it's more than just about speed.
"While peak download speeds will be faster, crucially there will be more capacity, which will allow for a whole host of new applications and services."
But the slow rate of EU progress clashes with the speed at which 5G is being tested and rolled out by the largest telecoms companies across the continent. Matthew Howett, founder of research company Assembly, said: “You can understand why they want a common framework but working to that timescale is risible. It doesn’t make any sense.”
Mr Howett said that the impending report by the UK government into telecoms infrastructure and its view of Huawei’s involvement would be likely to prompt more action from member states and that the slow pace of the plan belied the commission’s previous view that Europe needs to push ahead rapidly with 5G deployment. “We are in a global race to launch this technology. This timescale is incompatible with the EU’s other objective to be a leader in 5G,” he said.
Ofcom is at the centre of a campaign to persuade users to upgrade to faster broadband as well as reviewing broadband firms' pricing practices and ensuring customers get the best available deals.
According to the regulator's research, those with a basic broadband connection have less than a one-in-five chance of being able to stream Netflix in ultra-high definition.
Matthew Howett, founder of research firm Assembly, said the new code could act "as an incentive for broadband providers to move customers on to full-fibre connections, since speeds in the fibre network are easier to guarantee and less susceptible to network congestion".
"I don't doubt the need for full fibre coverage, or the eventual appetite for those speeds, but I struggle to see the need for quite the patchwork of infrastructure builders we now have," Matt Howett, founder and principal analyst at Assembly Research told TelecomTV.
"Scale is important in this game, especially when negotiating with suppliers, which surely puts smaller builders at a disadvantage," he noted. In addition, he warned that there is also recruitment and the training of engineers to build the networks to consider, which is a sizeable part of the cost of deployment. "What is that competing demand for labour going to do to the cost of build?" he asked.
"The benefits of 5G is that it not only delivers faster download speeds but crucially more capacity, which should go some way to alleviating problems of congestion in the network," said Matthew Howett, founder of research firm Assembly.
"All research points to the fact UK consumers have an insatiable appetite for data that is only going to grow over time, especially as 5G will in some instances be a replacement for fixed broadband."