The UK’s regulator Ofcom is promising another major review of telecoms, ten years after it last carried one out, calling it a strategic review. It will focus on incentive for investment and ensuring sufficient competition, aiming to promote broader coverage, better choice, lower pricing and higher quality services. And we know it will not just pay lip service to those ideas, it has a track record of driving change.
The previous review in 2005 ended up pushing for the separation of British Telecom’s core network from its access network, properly stimulating the unbundled local loop and driving up the number of broadband suppliers in the UK substantially.
However Ofcom warns that looking backwards doesn’t always give you the best clue about what’s ahead, and this review will likely have to look at how services are sold today and will take in cellular as well as fixed lines. To us this will focus squarely on the solidifying Quad play services in the UK and Ofcom will also want to ensure there are MVNO opportunities within cellular to make room for big brands from outside the technology arena.
Another area it is already trying to regulate, and take the lead on in Europe, will be VULA broadband licensing – changing the focus of unbundling from having a dedicated broadband line, to offering multiple suppliers a guaranteed broadband data stream over fiber.
Another key focus will be Ofcom asking what services it can deregulate in order to invite in more competitors.
Ofcom says it anticipates the review having two main phases, first evidence gathering which will take until the end of 2015 and then it will attempt to draw initial conclusions and the create a plan of action.
Ofcom will certainly be one of the first regulators in Europe to try to review its regulation process in such depth and it will contribute to how regulatory frameworks should change at the European level which may mean input into how consolidation of operators should be handled going forwards, and how net neutrality should be ensured in Europe at the legislation level.
How to ensure broadband system capacity and reliability are also bound to come up and Ofcom plans to ask whether BT, like Humpty Dumpty, needs to be put back together again, i.e. is it time to put BT’s network back with Openreach’s last mile access once again.
Ofcom reminded us that since its last review broadband adoption has increased from 31% to 78%; the take-up of bundled services has risen from 29% in 2005 to 63% today; and investment in superfast broadband has resulted in 78% availability and 27% adoption; while 3G broadband increased from 82% to 99% of premises, and 4G services are available to 73% of premises, with uptake now at 67%. It also says that unbundled broadband is responsible in the UK for 44% of broadband connection, effectively killing what was a cumbersome BT monopoly. Unbundled loop connections were just 17% in 2005.
Ofcom’s European Broadband Scorecard shows that the UK leads the EU’s five biggest economies on most measures of coverage, take-up, usage and choice for both mobile and fixed broadband. Following both commercial and public sector investment, average broadband speeds continue to grow, rising to 22.8Mbps for fixed broadband in November 2014, according to Ofcom, although other sources have UK broadband slower than that.