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.
The letter said the review aimed to ensure that Britain’s “critical national infrastructure remains resilient and secure”.
It did not mention Huawei by name, but said the “outcome of the review may lead to changes in the current rules” and that the companies “will need to take the review into consideration in any procurement decisions”.
Matthew Howett, principal analyst at Assembly Research, a research house that focuses on regulation and policy in the communications market, said: “I doubt we would have seen this if it was Nokia or Ericsson.”
Telecoms executives said the government may be pushing operators to make sure Huawei is only one of a diverse range of suppliers. But they also said it was possible that the Chinese company could be barred from the rollout of 5G in the UK, a move that would delay networks that are due to come online in 2019 and 2020.
The BDUK programme was widely criticised in its infancy after BT won all the contracts on offer, which led to accusations that it was rebuilding its monopoly position in commercially “unviable” areas using the public purse.
The programme has nonetheless successfully rolled out superfast broadband, which connects users to speeds of at least 24 Mbps, to more than 95 per cent of the country.
Matthew Howett, a telecoms and digital sector analyst, said: “Had there not been a subsidy arrangement it’s almost certain consumers in some rural areas would still be condemned to the slow lane for years to come.”
Indeed, others argue that the bold strategy of his early years will remain the basis for a recovery now.
Matthew Howett, founder of Assembly research, said Mr Patterson had acquired a “shining star” in EE — the UK’s largest mobile network — even if he struggled to balance the interests of shareholders, Ofcom and politicians as he tried to turn round a crumbling incumbent. “He couldn’t win,” he said.
The £1.35bn raised is a far cry from the £22.5bn windfall that the Treasury brought in 2000 when it sold 3G licences. It is also less than the £2.3bn raised in the 4G auction in 2013, which was seen at the time as a disappointing result for the government.
Matthew Howett, principal analyst at Assembly, the market research firm, said: “Even though the auction raised a fraction of the amount of the 4G auction or even the 3G auction two decades ago, the prices paid are above expectation which shows how valuable these airwaves are to operators, particularly given the emerging hype around 5G.”
Matthew Howett, an analyst with Assembly, argued that Openreach and its rivals need to feel confident that the proposed rules won’t shift dramatically to have confidence in making long term investments.
“It’s less about what the price is, but rather whether Openreach feels the rules of the game have changed, and whether they, and other infrastructure investors, can make similar investment commitments today knowing that the same regime will apply in the future,” he said.
However, there is genuine concern in the sector over to what extent the promises will be fulfilled. TalkTalk, for example, has only signed an initial agreement with its potential financial backer, which was revealed alongside a £200m fundraising, a profit warning and a dividend cut.
Matthew Howett, founder of research company Assembly, believes that the TalkTalk plans will be the most difficult to deliver on because of “a more complicated funding model and a shaky balance sheet that has angered investors”.
“Making the financial commitment is relatively easy. The real hard work starts with the digging,” said Mr Howett.
Ofcom has moved instead to introduce temporary regulations in business markets where it believes BT has significant market power. That includes the original plan to introduce charge controls on Openreach, BT’s engineering arm, which the group has resisted.
The regulator has also forged ahead with a plan to force Openreach to introduce ‘dark fibre’ products that allow wholesale customers like Sky and TalkTalk to take control of unlit fibre lines. Ofcom remains determined to introduce dark fibre into the market despite the court setback and Openreach’s opposition.
Matthew Howett, an analyst with Assembly, said that the situation has got “a bit messy” with some elements of the temporary regulation overlapping with consultations the regulator has already kicked off.
The ruling is the latest in a series of showdowns between BT and Ofcom. They faced off in court this year over business connectivity measures and will do so off again in December over the impending 5G spectrum auction rules.
Matthew Howett, founder and principal analyst with research company Assembly, said the case shows the UK government is not acting clearly when it comes to mobile network expansion. The higher fees for mobile phone providers, which in effect reduce their profits and ability to invest in their networks, came at a time when the government was trying to improve coverage. Indeed, the Budget included a £160m pledge by the government to invest in boosting the UK’s prospects in 5G network development.
“A couple of years ago Germany committed money that had been earned during a recent spectrum auction to be poured back into rural broadband initiatives. It’s about time the UK government started thinking in a similarly joined-up way,” he added.
The 2009 launch was the “envy of the world”, says Matthew Howett, principal analyst at research company Assembly, with other countries taking their own incumbent players to task for not matching the ambition of the Australians.
“While the type of navel-gazing we’ve seen in Australia recently usually uncovers some important lessons, the truth is infrastructure deployments at scale have always been complicated, expensive and rarely without setback. If broadband could be rolled out using reports, inquiries and investigations, the UK would probably have the fastest broadband in the world by now,” says Matt Howett, principal analyst with Assembly.
