Business Info - issue 135

businessinfomag.uk magazine 22 TELECOMS UK geographic area by 2017, halving the number of areas blighted by patchy coverage from partial ‘not-spots’; n a rise in full coverage from all four mobile operators from 69% of geographic areas to 85% by 2017; n reliable signal strength for voice for each type of mobile service (2G/3G/4G) – currently many consumers frequently lose signal or cannot get signal long enough to make a call; and n make the deal legally binding by accepting amended licence conditions to reflect the agreement – it will be enforceable by Ofcom. So what effect has that had? The answer is not a lot. In fact, in March 2017, the National Infrastructure Commission concluded that the UK is being held back by poor mobile phone connectivity and called for an end to ‘digital deserts’ in places that should have adequate signals, such as rail routes, roads and city centres. This is a clear sign that the Government needs to get tough and allow everyone to roam free in the UK, just as we can now do in Europe. Unfortunately, for years the Government and its regulator have consistently bottled every tough decision in the industry. In 2017, Ofcom decided against fully separating Openreach from BT, which would have restricted BT’s influence on the market. BT still provides the cash and can veto the Openreach Chief Executive; planned penalties for missed appointments were watered down and not made automatic; Openreach remains an organisation that no end user can talk to directly; and we are already seeing signs that BT is beginning to use the ‘they are a separate company’ excuse for not dealing with issues caused by Openreach. Even when Ofcom introduces a good policy, such as clear calling, it does not enforce it. It is almost two years since it made it mandatory to show prominently the cost of calling 084 and 087 numbers wherever they are promoted. Yet daily there are examples of companies, large and small, blatantly flouting the rules. And when has Ofcom ever fined anyone for doing so? So far, never. It had to rely on the Advertising Standards Authority to toughen up the rules on broadband speeds rather than set out clear terms itself. Financial challenges Given some of the financial challenges the networks and operators are having, it is important that the Government and regulators intervene. In a recent report, the Economist predicted that average revenue per user (ARPU) would suffer as result of increased competition. In 2018 it expects ARPU to fall by 2.3% for mobile operators and by 11.5% for fixed line. Competition in the consumer markets is coming from providers such as WhatsApp and Viber. A recent survey showed that almost a third of people do not use their mobiles for voice and texting is down by almost 40% since 2012. The growth of VOIP and SIP is eating into the profits historically generated by ISDN. It is a Catch 22. Telecoms needs large amounts of capital to create new infrastructures to generate new revenues. However, quite often the new revenues are lower than those from the old technologies they replace. A survey of operators conducted by Ericsson found that 86% view IoT as key for monetising revenues from 5G. Add in the extra costs of improving security as cyber threats grow and regulations like GDPR come into force and you can see how the situation could get worse rather than better. Unfortunately, I think 2018 promises more of the same, unless drastic action is taken: lots of stories and hype around ‘technology taking over our lives’; more reports showing how badly off the UK is compared to the rest of the world when it comes to telecoms; politicians spouting soundbites promising action but doing nothing tangible; and more confusion for businesses on where to spend their technology pounds. What will improve the situation? The question, then, is ‘What do we need to improve the situation, to make a real difference?’. This is my list of wishes: 1 Acknowledge the 2014 mobile deal has not led to the required improvement in mobile coverage and end the block on roaming in the UK. 2 Force BT to reduce by half the wholesale cost of all broadband connections that do not meet the minimum Government speed target. Force resellers to reduce their prices by half as well. 3 Raise the Government minimum speed target annually to reflect changing demands. 4 Set bold targets to offer the best infrastructure in Europe – critical if we want to attract inward investment post-Brexit. 5 Extend the size of company protected by the Telecoms ombudsman to 50 employees and align other laws, such as no automatic rollovers and transparent penalties. 6 Make all consumer broadband, phone line and mobile advertising carry prominently the latest Ofcom stats on complaints received. 7 Properly fund the rollout of FTTP and 5G with the aim of becoming world leaders by 2020 – not world laggards. You could fund it by scrapping or delaying HS2. 8 Link funding to heavy penalties, including loss of licences for any failure to deliver. 9 The oil and gas industry has benefitted from generous tax breaks for investing in the North Sea. Do the same for infrastructure. Let’s hope those in power are listening! Changes are needed if we are to get the telecoms infrastructure we need for businesses to be competitive. Bendy phones will be useful and fun but they are not enough on their own. Dave Millett has over 35 years’ experience in the Telecoms Industry. He has worked in European Director roles for several global companies. He now runs Equinox, an independent brokerage and consultancy firm. He works with many companies, charities and other organisations and has helped them achieve savings of up to 80%. He also regularly advises telecom suppliers on improving their products and propositions . www.equinoxcomms.co.uk Twitter: @equinoxcomms LinkedIn: http://www.linkedin.com/pub/ dave-millett/2/17b/a94 ...continued