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A new annual report, commissioned and funded by BT and compiled by Analysys Mason, has claimed that the UK will maintain its leadership of the so-called European Union (EU) Five economies for availability and take-up of superfast (30Mbps and up) broadband in 2020 if current trends and regulatory practice continue.
As in previous years, the Analysys Mason report compared the UK’s broadband market only against the four other largest economies in the EU – France, Germany, Italy and Spain – with the addition of Portugal and Sweden for 2016.
It is important to be aware that other reports on European broadband are available and that a number of other EU markets, notably Romania and most of the Nordic economies, have substantially faster average broadband speeds, although their take-up and availability rates may differ.
Matt Yardley, Analysys Mason partner, said the report brought “crucial analysis” to ensure that the debate over the future of the UK’s digital infrastructure is well-informed.
“The UK generates very good outcomes on all key broadband metrics, in part due to the regulatory approach taken to date,” said Yardley. “That performance is expected to improve if companies deliver on their plans to invest in rolling out superfast and ultrafast networks.”
By the end of the decade, Analysys Mason expects the UK to be second among the EU Five for availability of ultrafast broadband services, classed as 100Mbps and above, with availability growing to 85% between now and then. It will also be rated second in infrastructure competition.
In a fillip to BT, which is currently waiting a final decision from regulator Ofcom on whether its infrastructure arm, Openreach, should become a structurally separate business, the report also noted that the UK was expected to perform better in many areas than Australia and New Zealand, where structural separation has been implemented.
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But it did cast doubt on whether there was a plausible economic need for a third national broadband network. In its consultation on the future of Openreach earlier this year, Ofcom said it would support such a network, reaching 40% coverage of UK premises by overbuilding two existing networks – most likely Openreach’s and Virgin Media’s – but Analysys Mason said it was “highly unlikely” that a third operator could commit to build at such scale on a commercially viable basis.
It based this conclusion on an analysis of the current wholesale access regime, level of competition, population density, low numbers of people living in apartment blocks, and consumer willingness to pay.
“The UK has a highly competitive broadband market, but our economic modelling suggests that encouraging a third separate network to invest in covering more than 5% to 10% of the country will be extremely difficult to achieve,” said Yardley.