Vodafone’s merger with Three would help build the 5G network Britain needs
Britain’s connectivity issues – and lack of standalone 5G – are at risk of undermining the strength of our tech sector, writes Ed Vaizey.
I am proud of the strength of the UK tech sector. We have produced almost 400 high growth start-ups since 2000, including 144 unicorns (companies with valuations of $1bn or more). These are businesses which are at the cutting edge of the latest industries from green finance, portable DNA sequencing and electric powered aircraft. They have the potential to revolutionise numerous aspects of our daily lives. However, the UK risks falling behind in the race to become global leaders in these industries of the future.
There are myriad problems facing the tech sector, including talent and access to capital. But I want to focus specifically on the importance of creating high-quality digital infrastructure that can power the industry. The government has rightly identified the need to ensure the UK has the broadband and mobile connectivity it needs. This means full fibre and standalone 5G. Standalone 5G essentially operates independently of the 4G network and offers the potential for faster response times and better access to the higher data rates required by many modern technologies. The government has made good progress creating the policy and market conditions to encourage investment in full fibre. It now needs to do the same for standalone 5G.
Standalone 5G will lead to the unlocking of billions of pounds of economic value and will drive the improvements in productivity we desperately need. Earlier this year, the government recommended nationwide standalone 5G coverage in all populated areas by 2030. However, it also noted the current investment environment to enable this did not exist in
the UK.
Without this investment this network won’t get built, and we won’t experience these benefits. Quite simply, the UK cannot cement its position as a science and technology superpower without a leading standalone 5G network, and this won’t happen unless operators are able to invest sustainably in their networks. This means empowering the regulators to make decisions that help boost investment and drive growth, while continuing to protect consumers.
Despite much debate, the recent proposed merger between Vodafone UK and Three creates an opportunity to ensure that market reform leads to positive outcomes for the UK. The companies are able to commit to invest and roll out a 5G standalone network to more than 99 per cent of the UK population by 2034 because together they will have the necessary scale to do so.
It’s a big decision for the Competition and Markets Authority to grapple with, but, for me, the positives do outweigh the negatives. The opportunity is to secure major investment while ensuring a new company can continue to compete, rather than waiting to see what might happen and hoping for the best.
Ultimately a more efficient and competitive communications market holds the key to ensuring that every part of the UK has the opportunity to benefit from the data revolution. If we want to maintain our position as a hotbed for tech start-ups, create even more unicorns and ensure people can benefit from improved public services and higher productivity, then having a better 5G network in place sooner has to be a priority.