The Chancellor Philip Hammond has outlined his plan to invest in infrastructure to bolster the post Brexit economy in the years ahead.
The Chancellor was speaking at the annual CBI dinner, where he pledged to ensure that most homes and businesses would by 2025 enjoy the benefits of a “full-fibre” connection.
He pointed out that every century had important infrastructure developments, in that 19th century had railways, 20th century motorways, and now the 21st century needs full-fibre (FTTP – fibre to the premise) connectivity.
The Chancellor pointed to previous investment pledges such as £640 million of public money in artificial intelligence, and over £1.7 billion in autonomous and ultra-low emission vehicles.
He has also pointed to the government commitment to the largest increase in public R&D spending in three decades, to raise R&D investment across the economy to 2.4% of GDP.
But he said that the UK will not be at the front of the pack, “unless we have infrastructure that is fit for the future.”
“And that is why infrastructure is at the heart of our plan,” he said. “In the 18th century, it was canals; in the 19th, it was the railways, and in the 20th the arterial roads and then the motorways.
“In the 21st century, fibre networks will be the enabling infrastructure that drives economic growth,” he said.
He pointed out that more than 95 percent of the UK is currently connected to superfast broadband, but the vast majority of these connections involve fibre connectivity to the green street cabinet (DSLAM), but the last mile connection to people’s houses and business is usually a slower copper wire.
“But we must now take the next big leap forward,” said the Chancellor. “Full-fibre networks are faster, more reliable, and cheaper to operate than their copper predecessors. Over a million premises already have direct access to them…70 percent of those connected in the last 18 months alone.”
“But if we are to achieve our ambition of a truly high-speed economy, and keep up with our competitors, then we need a step change in our approach,” he said. “So I am now setting a new target to see full-fibre to the premises connections being available to 15 million premises, that’s the majority of homes and businesses, by 2025.”
The Chancellor admitted this was an ambitious target, and said it would require industry (BT Openreach etc) to connect more than 2 million additional premises a year for the next seven years.
“We won’t do that by government diktat,” he said. “We will do it by creating the conditions for the market to deliver,…and we will use all the tools at the government’s disposal to ensure that target is met.”
“And we’ll go further, by committing to finish the job – and deliver a nationwide full-fibre to the premises network by 2033,” he said. “Running both copper and fibre networks indefinitely will not benefit either the consumer or the industry. So we must start thinking now about that switchover and how to sharpen the incentives for industry to move customers away from copper and on to fibre.”
He said that Matt Hancock, the DCMS Secretary, will set out the Government’s strategy to deliver these targets in the Future Telecoms Infrastructure Review, later this Summer.
But some experts have cast doubt on the broadband plan, saying many small and mid-sized towns would miss out on FTTP deployments.
Consumer advice website Thinkbroadband for example told the BBC that the government was unlikely to reach its goal.
But these tend to focus on cities and some rural areas, and the projects have faced delays.
Thinkbroadband’s editor Andrew Ferguson told the BBC that it would take a lot of work to reach the target, adding: “If other government policies such as building more affordable homes come to fruition, then 15 million will not be a majority but account for around 45 percent of premises.”
Instead, he predicted that by 2025, the government would need a new initiative to connect UK regions that are likely to be overlooked.
“We are expecting the small and medium sized towns to be the ones that miss out in the full fibre roll-out race,” he is quoted as saying.
The government has made no secret of the fact that it wants the UK to have a full fibre network as well as 5G connectivity going forward.
But rollouts of FTTP have been patchy at best, and it is thought that currently only 3 percent of UK homes can currently access a FTTP connection.
BT Openreach has already planned to reach 12 million homes by the end of the decade using a combination of fibre to the premise (FTTP) and G.Fast, which speeds up copper connections.
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