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October 19, 2016updated 28 Oct 2016 2:28pm

UK digital minister: We need full fibre to build a digital nation

Matt Hancock MP pledges 5G and fibre roll-out as BT CEO calls for end to Openreach debate.

By Alexander Sword

The UK digital and culture minister Matt Hancock signalled a new phase in the Government’s broadband strategy as he announced plans to bring about ubiquitous 5G and fibre over the next ten years.

Hancock, who took the position over from Ed Vaizey in July, outlined the approach at Broadband World Forum, including a plan to introduce universal connectivity and to produce a more competitive market.

Hancock took over his role from Ed Vaizey in July.

Hancock took over his role from Ed Vaizey in July.

“The destination of this journey must be to push connectivity as far out as it will go,” said Hancock.

He described three main tenets to the plan: completing the roll-out of current technologies such as 4G and superfast broadband, deploying deeper connectivity in areas of deep need and working to roll out more advanced technologies such as 5G and fibre.

On the fibre aspect, Hancock said that fibre was “the underpinning of a digital nation”, and ultimately other technologies such as copper technology G.fast would not provide the necessary connectivity. He said that these had been the right decisions “at the time” but customer needs and expectations had now advanced.

Hancock also suggested that the Government might aim for a less BT-centric market in the future.

“I will be on the side of the challenger,” he said.

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Discussing fibre, he praised KCOM, the operator that due to an idiosyncrasy in the UK broadband market is the primary operator in the Hull market.

fibre

The UK lags on fibre coverage.

Also speaking at Broadband World Forum, BT CEO Gavin Patterson suggested that regulators and rivals should end the argument over the separation of Openreach from the BT Group, saying that the “uncertainty” was harming investment.

“It is not unreasonable for investors to want certainty,” said Patterson. “We are not doing ourselves any favours by prolonging the debate.

“We need to be working with government and regulators to drive choice and speed for customer but provide a return for investors, because they have to drive the majority of this investment.”

Patterson said that the current regulatory approach served the UK well in terms of consumer choice, and that separating Openreach might endanger this.

“You need to be able to make investments over long periods,” said Patterson.

Ultimately, Patterson agreed that the UK would end up with a fibre network. However, he disagreed with critics of G.fast, saying that it provided a combination of affordability and speed of roll out.

Patterson also commented on the effects of the UK’s vote to leave in the EU Referendum; he said that in the short term there had been little immediate trading impact on BT.

Gavin Patterson, BT CEO, talks to CNBC's Karen Tso.

Gavin Patterson, BT CEO, speaks at the Broadband World Forum.

However, he suggested investment decisions by BT’s customers were already being shaped by Brexit.

“We are beginning to see customers assessing where they put their own investments. Particularly on the B2B side of that, that’s what our business is. We expect to see an impact on that in the medium term.”

In the longer term, he also said that there could be negative effects on BT’s pension deficit due to falling bond yields.

Patterson also said that investment in UK infrastructure would become even more crucial as the UK attempted to succeed outside of the EU.

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