Superfast and Ultrafast Report Part II – policy and public sector
In the past several years, the UK’s telecoms sector has seen unprecedented levels of private investment and gigabit-capable broadband network expansion, although since mid-2023 this has begun to ease. According to UK telecommunications regulator, Ofcom, in its latest Connected Nations report published on 19 December 2023, nationwide gigabit-capable broadband coverage exceeded three-quarters (78%) of UK residential premises, up from 70% in the previous year. For the same period, full fibre (FTTP) network coverage was available to more than half of UK residential premises (57%), sharply up from 42% last year.[1]
However, this coverage is certainly not uniform throughout the UK, especially in terms of rural versus urban network footprints along with full fibre access in the devolved nations, such as Scotland and Wales, where rural rollouts have proved more difficult.
By 2026, Ofcom reported that if all network deployments are realised 27m (91%) UK premises would have full fibre availability, and gigabit-capable coverage could be in excess of 94%.[2] Demonstrating the general market slowdown, full fibre network coverage plans up to 2025 are down by around 4 percentage points compared to what was reported to Ofcom in 2022. Moreover, the actual deployment achieved in the intervening 12 months was also down by around 3 percentage points from previously reported aspirations.[3]
Several new legislative initiatives have been introduced over the past year to propel the rollout of a nationwide gigabit-capable digital infrastructure, increase mobile network coverage, boost the UK economy and ensure the country remains technologically competitive and forward-thinking. Key items include the UK Wireless Infrastructure Strategy, the newly proposed Access to Telecommunications Networks Bill, along with the barrier-busting extra provisions for Alternative Dispute Resolution (ADR) as part of the 2022 Product Security and Telecommunications Infrastructure Bill.
Further consultations and trial programmes have been carried out such as the Broadband Universal Service Obligation (USO) review along with one setting out the government’s proposed policy approach to connecting Very Hard to Reach (VHTR) premises across the UK. Both consultations were launched simultaneously to enable the Department for Science, Innovation and Technology (DSIT) to ensure that policy objectives are aligned across both areas.[4]
Ofcom has also introduced key regulations to protect the consumer, promote competition within a highly saturated Internet service provider (ISP) and mobile network operator (MNO) market, and support the government’s legislation. Ofcom’s key telecoms sector publications throughout the year are covered below.
A key consultation due to be published in Q4 2024/25 is the future review of wholesale fixed telecoms markets which will set regulation from April 2026 to March 2031. The consultation will see if any changes are needed to its approach outlined in the previous review.
Point Topic has recently published its in depth wholesale market analysis, Wholesale markets in the UK and why the AltNets shouldn't play.
1 Government Regulatory and Legislative Initiatives in Support of Nationwide Gigabit-capable Coverage by 2030
The section below provides further information about the progress of Project Gigabit overseen by the Department for Science, Innovation and Technology (DSIT) through its Executive Agency, Building Digital UK (BDUK). Project Gigabit progress reports along with recommendations for the acceleration of the programme are also covered in this section, as well as other key government legislative reforms and proposals to support the telecoms sector.
1.1 More than one million premises connected to gigabit-capable broadband by government funding
On 22 February 2024, DSIT reported that 1,006,800 homes and businesses have been connected, or are able to access, a faster and more reliable broadband connection due to UK government-funded programmes since the first upgrade was delivered in August 2012.
Table 1 below provides a breakdown of the progress of premises passed by BDUK intervention programmes up until 1 January 2024. Table 2 gives an overview of premises passed by region for the same period.
Table 1: Premises passed by BDUK intervention to 1 January 2024
BDUK intervention | Total premises to 1 Jan 24 | 1 Apr 23 - 1 Jan 24 | 1 Apr 22 - 31 Mar 23 (r) | 1 Apr 21 - 31 Mar 22 (r) | By 31 March 2021 (r) |
Superfast programme | 746,500 | 31,600 | 92,000 | 99,700 | 523,200 |
Vouchers schemes | 250,800 | 35,800 | 69,800 | 53,900 | 91,200 |
of which were connected vouchers | 110,400 | 20,900 | 25,500 | 22,900 | 41,100 |
Gigabit Infrastructure Subsidy (GIS) | 4,300 | 4,200 | 100 | <50 | <50 |
Hubs | 5,300 | <50 | <50 | 3,300 | 1,900 |
TOTAL | 1,006,800 | 71,600 | 162,000 | 156,900 | 616,400 |
Source: BDUK January 2024 Performance Report
Tables are rounded to the nearest 100, so figures may not sum due to rounding; (r) indicates where data has been revised; <50 indicates a value greater than 0 but less than 50
Figures are based on BDUK’s premises passed data, which is the full set of UK premises that BDUK treats (or has treated) as eligible for each of BDUK’s interventions. As a result of this, BDUK’s premises passed figures do not align with Ofcom’s premises base.[5] Worth noting is BDUK’s inclusion of ‘child’ premises (e.g. apartments in houses of multiple occupancy) in the scope of its programmes.
Table 2: BDUK premises passed by year, nation, and region to 1 January 2024
Region | Total premises to 1 Jan 24 | 1 Apr 23 - 1 Jan 24 | 1 Apr 22 - 31 Mar 23 (r) | 1 Apr 21 - 31 Mar 22 (r) | By 31 March 2021 (r) |
ENGLAND | 710,200 | 44,800 | 95,100 | 104,400 | 465,900 |
North East | 23,000 | 3,000 | 3,900 | 4,500 | 11,600 |
North West | 51,500 | 4,700 | 4,300 | 4,300 | 38,200 |
Yorkshire and the Humber | 66,500 | 6,200 | 4,900 | 7,500 | 48,000 |
East Midlands | 81,000 | 5,400 | 10,400 | 13,300 | 51,900 |
West Midlands | 66,400 | 4,500 | 8,600 | 6,600 | 46,700 |
East of England | 141,100 | 5,000 | 20,400 | 28,800 | 86,900 |
London | 9,200 | <50 | 300 | 300 | 8,600 |
South East | 148,900 | 7,200 | 22,200 | 24,800 | 94,800 |
South West | 122,500 | 8,700 | 20,100 | 14,300 | 79,400 |
NORTHERN IRELAND | 118,900 | 13,400 | 40,300 | 32,600 | 32,600 |
SCOTLAND | 68,800 | 11,500 | 17,500 | 6,800 | 33,000 |
WALES | 108,800 | 1,900 | 9,100 | 13,000 | 84,800 |
TOTAL | 1,006,800 | 71,600 | 162,000 | 156,900 | 616,400 |
Source: BDUK January 2024 Performance Report
Tables are rounded to the nearest 100, so figures may not sum due to rounding; (r) indicates where data has been revised; <50 indicates a value greater than 0 but less than 50
1.2 BDUK’s future aims in delivering superior digital infrastructure
BDUK published its Corporate Plan 2023 – 2026 in July 2023 which outlined its fixed line gigabit-capable broadband network coverage aims to reach 1,560,000 premises by December 2025 (see Figure 1). In addition to expanded fixed line broadband coverage, BDUK works with commercial mobile network operators (MNOs) on delivering the Shared Rural Network (SRN), a £1 billion joint investment programme to extend 4G mobile coverage to 95% of the UK geography by the end of 2025 with the majority of the UK population having 5G coverage by 2027. An update on the SRN is covered in Section 1.4 of this report.
*This is the total number of premises BDUK expect to be passed by its own interventions and the wider market’s commercial plans.
Given the pace and scale of commercial broadband coverage BDUK has subsequently amended its planned intervention areas over the years. It is also aware that the market is in a state flux with increasing instances of supplier consolidation. However, this is not unique to the digital telecoms sector as many infrastructure projects have been impacted by the challenging economic conditions such as high inflation and more scaled back capital investment according to the Infrastructure and Projects Authority.[6]
Despite turbulent conditions, the 85% gigabit-capable coverage by 2025 target does look attainable with most urban and a sizeable portion of rural premises having gained access to better broadband or to be covered by 2030. Reaching the final very hard to reach areas with a full fibre network remains a challenge and will likely push nationwide coverage past the 2030 target.
1.3 Connecting hard to reach premises outside of Project Gigabit and the commercial market scope
As Project Gigabit aims to deliver gigabit connectivity to the hardest to reach parts of the UK - around 20% of UK premises, very hard to reach premises represent about 0.3% (under 100,000) of UK homes and businesses and present several challenges to deployment. For premises located on isles or mountainous regions the cost of rolling out a full fibre network becomes prohibitively expensive. The government has recognised the need for the use of hybrid technologies that preset a fast, robust, and cost-effective alternative.
The map below provides an overall picture of UK constituencies with broadband speeds below 10 Mbps as of May 2023. This speed is the minimum required by Ofcom’s Universal Service Obligation, however it differs from connecting very hard to reach areas, broadband USO guaranteeing a minimum service specification rather than update on Ofcom’s USO is covered further in this report.
In October 2023, DSIT published its recommendations for these areas in its Digital Connectivity: Consultation on Improving Broadband for Very Hard to Reach, which closed in 27 November 2023. Key recommendations are outlined below with government decisions due to be published in late 2024.
1.3.1 LEO Satellite Alpha Trials
On 1 December 2022, the government launched a series of Alpha Trials to test the capability of Low Earth Orbit (LEO) satellites to deliver improved digital connectivity to sites in very hard to reach locations. The trials which are expected to run for two years aim to test at scale the ability of LEO satellites (Starlink and OneWeb) to deliver ‘high-speed’ and reliable Internet connections to remote locations. To date, there have been more than a dozen trial sites announced with initial results indicating that download speeds of up to 200 Mbps are achievable.
1.3.2 Very Hard To Reach Initial Satellite Grant Fund
In April 2023, DSIT announced it will commit £8 million to delivering high-speed broadband for up to 35,000 of the UK’s most remote properties. DSIT noted that while it anticipated that up to 35,000 of the most remote premises will be eligible for the scheme, it will not cover all very hard to reach premises. The consultation further stated that, ‘the cost of LEO satellite services is relatively high and therefore may also be a barrier for some premises at this stage of market maturity.’[7]
1.3.3 Rural Connectivity Accelerator Trial Fund
On 6 June 2023, alongside the government’s publication of the Unleashing Rural Opportunity policy paper, DSIT announced the launch of a £7.3 million trial fund. The fund will in part support the deployment of a small number of hybrid network trials combining satellite and fixed wireless services.
1.4 Shared Rural Network – Progress Update
The Shared Rural Network (SRN) is a programme with the UK’s four major mobile network operators (MNOs): EE, Virgin Media O2 (VMO2), Three, and Vodafone. The four MNOs are investing £532 million to upgrade their current infrastructure, deploy to new sites and eliminate the majority of ‘partial not-spots’. The government is providing an additional £500 million to build new masts to eliminate ‘total not-spots’ in hard to reach areas where there is currently no coverage at all. The majority of the government funding is being invested in the most rural parts of Scotland.
According to Ofcom’s 2023 Connected Nations report, 93% of the UK landmass had 4G coverage from at least one operator, with 71% of the UK landmass having 4G coverage from all operators, and 7% having no 4G coverage.[8] The SRN aims to provide 4G coverage to 95% of the UK landmass by end of 2025 (Figure 3).
The Ofcom deadline for delivery of industry funded coverage improvements in partial not-spot areas is June 2024. This will be followed by the deadline for delivery of publicly funded coverage improvements in total not-spot areas in early 2027, but it is expected coverage will be delivered to 95% of the UK by the end of 2025.
1.5 Policy Paper on Spectrum Statement to maximise spectrum value
On 11 April 2023, DSIT published its updated and future-looking Spectrum Statement maximise the overall use of spectrum across many different fields. Although spectrum is a finite resource it also reusable. In recent years, significant progress has been made in spectrum efficiency – especially in frequency bands and locations, it is still heavily underutilised in many places and at many times. If this underutilised spectrum could be made available for use, and reused intensively, additional value could be realised.
DSIT outlined its key principles in for a renewed focus on maximising value by progressively removing spectrum-related constraints on growth, which include:
Spectrum is a strategic asset and an important enabler for a range of government policy objectives.
Spectrum management should promote innovation and investment alongside consumer-focused outcomes.
Spectrum management should ensure efficient and optimum use and be linked to actual usage with users empowered to make decisions where appropriate.
Spectrum management should itself take best advantage of innovation as well as supporting innovation in the services which use spectrum.
Ofcom is to review and set out for ministers a clear and forward looking rationale for its approach to setting mobile spectrum fees before the end of 2023. This should include an assessment of the current tools used to deliver the benefits of a market-based approach to spectrum management, considering how well these mechanisms have delivered their stated objectives to date and the extent to which they may need to evolve to adapt to changing market conditions and support a strong investment environment.
1.6 Wireless Infrastructure Strategy until 2030
Published on 11 April 2023, DSIT’s Wireless Infrastructure Strategy put forward a key headline nationwide ambition for 5G coverage in all populated areas including those classified as rural by 2030.
Demand for mobile data over public mobile networks has grown 40% per year on average over the last decade,[9] with expected growth in data traffic using advanced wireless technologies in the coming decade. Ofcom’s Mobile Market Review suggests data growth could range from a 25% increase per year to 2030 to 55% increase per year to 2030. DSIT’s commissioned research shows that there will be an increase in demand for wireless data but notes that this would be less steep if a greater share of this traffic is carried over fixed networks (Figure 5).
DSIT recognises 5G’s significant potential yet highlighted the that wireless operators are facing a challenging investment environment – delivering high-quality 5G is costly and potential additional revenues are uncertain. However, the Wireless Infrastructure Strategy highlighted that, ‘…without clear action, the market for advanced 5G services will remain nascent as many business and public services do not yet fully understand the benefits or how to navigate the supplier ecosystem for 5G enabled digital products, applications and services.’[10]
In support of this aim, DSIT announced the launch of its £40 million 5G Innovation Fund on 31 July. The stimulus package will create 5G Innovation Regions by awarding funding to areas that can demonstrate how they will drive the development and adoption of 5G and other technologies.
Running until March 2025, the successful 5G Innovation Regions will be able to develop their own digital ecosystems, take advantage of new and emerging technologies, and amplify local and national activities such as Project Gigabit, Investment Zones, and devolution deals to support local digital growth.[11]
The ten 5G Innovation Regions were announced on 16 November 2023 (Table 3).
Table 3: Successful 5G Innovation Regions, projects, funding, and sectors
Region | Project Name | Funding | Sectors |
Belfast City | The Belfast 5G Innovation Region | £3.80m | Creative industries, transport and logistics, advanced manufacturing |
Cumberland Council - Borderlands Partnership | The Boarderlands 5G Innovation Region | £3.80m | Tourism |
Glasgow City Council - Glasgow City Region | The Glasgow 5G Innovation Region | £3.23m | Social housing, health and social care |
Greater Manchester Combined Authority | The Greater Manchester 5G SMART Decarbonisation Network (GM 5G SDN) | £3.06m | Energy, housing, transport |
North Ayrshire Council - Ayrshire Growth Deal Region | The Ayrshire 5G Innovation Region | £3.79m | Advanced manufacturing, aerospace, life sciences, tourism, creative industries and public sector |
Oxfordshire County Council - Oxfordshire, Berkshire, Buckinghamshire, Bedfordshire, Cambridgeshire | England’s Connected Heartland (ECH) | £3.80m | Rail transport, advanced engineering |
Shropshire Council - River Severn Partnership | The River Severn Partnership Advanced Wireless Innovation Region | £3.75m | Rural industries, water, public sector |
The Council of the City Of Sunderland - North East Combined Authority | The North East 5G Innovation Region | £3.79m | Transport and logistics, creative industries, rural industries: Agri-tech |
West Midlands Combined Authority | The West Midlands 5G Innovation Region | £3.80m | Advanced manufacturing, smart communities |
West Sussex County Council - Sussex (East and West) | The Growing Sussex 5G Innovation Region | £3.79m | Rural industries (Agri-tech and food production) |
Source: DSIT
1.7 UK Research and Innovation’s £62m Technology Missions Fund (TMF) Future Telecoms Programme
Announced by the DSIT on 22 February, the UK Research and Innovation (UKRI) is to receive £62m in government funding to accelerate future telecoms technologies.
Sixteen new funded projects will take a share of £22 million to ‘support the development and commercialisation of cutting-edge tech solutions and lay the groundwork for the networks of the future.’[12]
Future Telecommunications Challenge competition projects include developing the world’s first all-optical network switch for ultra-low power, ultra-low latency for future telecoms networks, to developing wireless solutions for transport applications and high-speed network connectivity challenges.
In addition, a further £40 million in funding will provide further support for three existing Future Telecoms Research Hubs led by Imperial College London, and the universities of Oxford and Cambridge, alongside partner universities across the UK.
2 Ofcom Statements, Announcements, and Proposed Plan of Work 2024/25
The section below provides an overview of key publications published by the regulator since January 2023. For a detailed list of its consultations and statements see here.
2.1 Statement: Improving broadband information for consumers
In an effort to demystify IT sector jargon for the consumer, Ofcom released its Improving broadband information for consumers guidelines for broadband service providers. As many providers use the term ‘fibre’ interchangeably to cover services being delivered by FTTC or FTTP connections, Ofcom stated that it is important for consumers to have access to information on the underlying technology of their broadband service.
Ofcom decided that the following guidance would meet its objectives:
Providers should give a short description of the underlying technology of each product offered at point of sale on the website, in Contract Information and in the Contract Summary, using one or two clear and unambiguous terms such as ‘cable’, ‘full-fibre’, ‘copper’ or ‘part-fibre’.
The use of the word ‘fibre’ on its own for describing the underlying technology is ambiguous, and therefore should not be used to describe the underlying technology.
Providers should give a more detailed explanation of the underlying technology (for example through a link) so that consumers can understand what it means for them. It should also be given in a form that is accessible and easily understood.[13]
2.2 Protecting the telecoms consumer through the prohibition of inflation-linked price rises
This consultation, which ran from 12 December 2023 to 13 February 2024, sets out Ofcom’s plans for new consumer price protections in telecoms, including a ban on price increases linked to uncertain future inflation.
When people sign up to a phone, broadband or pay TV contract, they should be clear and certain about what they will have to pay throughout its duration. This has not always been the case with an increasing number of suppliers’ contract terms allowing for an annual mid-contract price rise linked to future Consumer Price Index (CPI) inflation plus an additional percentage, typically 3.9%.
In a response to Ofcom’s present review of inflation-linked mid-contract price rises announced in early January that starting from summer 2024, it will be introducing a pricing model consistent with Ofcom’s approach, moving away from % figures and CPI, and offering instead, a clear and simple view of any changes in “pounds and pence”. However, current BT subscribers will still feel the rub of its current model, CPI (4%) + 3.9% price increase coming into effect from 1 April.Ofcom's proposed ban on inflation-linked mid-contract price rises review findings is due to be published in spring 2024.
2.3 Consultation: Supporting increased use of shared spectrum
Ofcom ran this consultation from 23 November 2023 to 2 February 2024. As previously mentioned Spectrum sharing is a key part of Ofcom’s strategy for spectrum management. The Shared Access framework provides a mechanism to access frequencies with established or developing mobile equipment ecosystems, on a localised basis. With more than 1,500 licenses issued by the regulator there has been an increasing interest in this form of access over the past four years.
2.4 Call for input: Review of the use of fixed wireless links and spectrum implications
Launched on 25 October 2023, the Call for Input (CFI) sought responses from stakeholders on their current and future potential use of fixed wireless links (fixed links), along with the decision factors that lead to the selection of a fixed wireless link instead of an alternative technology.
This CFI is designed to help Ofcom gain a deeper understanding of trends in fixed links and provide us with the information we need to effectively manage the finite radio spectrum resource and ensure it is used optimally across the UK.
Since its last review of fixed links spectrum in 2016-18, a number of bands have been closed (see Figure 6) to new fixed link use and are being cleared of existing fixed link use, including the 26 and 40 GHz bands. The total amount of spectrum available for new fixed link assignments in the UK is now approximately 22.1 GHz, a decrease of around 5 GHz since 2016.
As MNOs make up more than half of spectrum usage (Figure 8), Ofcom will be keeping a close eye on how to regulate the finite resource in order to ensure technological advances across all sectors are fit for purpose.
2.5 Key Quarterly Telecoms Sector Data Analyses and Communication Market Report 2023 - Ofcom
Ofcom produces several key telecoms sector data analyses throughout the year, which includes subscribers, data revenues, and market share updates. Since our last report, the following reports have been published as below:
On 20 July Ofcom released its Communications Market Report 2023 which provided an overview of the telecoms sector as per the market data updates listed above. It also includes statistics on consumer research and technology tracker and costumer satisfaction data for the year ending 2022.
2.6 Consultation: Ofcom’s Proposed Plan of Work 2024/25
Ofcom’s Plan of Work for 2024/25 was published on 15 December 2023 and is centred around four evidence-based priority outcomes: ‘Internet we can rely on’, ‘Media we trust and value’, ‘We live a safer life online’, and ‘Enabling wireless services in the wider economy’ with an additional section on Post.
Starting in April 2024, Ofcom will begin its next Wholesale Fixed Telecoms Market Review (WFTMR) with the current regulatory framework that it set under the WFTMR 2021 ending in March 2026. It will start its next review which will set the regulatory framework from April 2026 to March 2031 and publish its main consultation by Q4 2024/25. This will cover the markets for physical infrastructure access, wholesale local access, leased line access and other relevant markets. It will assess whether the framework it put in place in 2021 to promote network investment and competition remains appropriate. [14]
A few of the key strategic points and outcomes can be found in Table 4. For a complete list of Ofcom’s projects for the financial year see its Project Annex starting on page 37 of its Plan of Work 2024/25 report.
To access the complete report please contact isabelle.anderson@point-topic.com
[1] Ofcom, Connected Nations 2023, 19 December 2023, p. 3.
[2] Ofcom, Connected Nations - Planned Network Deployment, 17 October 2023, p. 4.
[3] Ibid.
[4] DSIT Reviewing the broadband Universal Service Obligation Consultation and Improving broadband for Very Hard to Reach premises ran from 2 October – 27 November 2023 with the government’s findings to be published in early 2024.
[5] See Section 3.7 of January 2024 performance reporting for BDUK’s methodology of premises passed versus Ofcom’s methodology.
[6] Infrastructure and Projects Authority, Infrastructure and Projects Authority Annual Report 2022-23, 20 July 2023.
[7] DSIT, Digital Connectivity: Consultation on Improving Broadband for Very Hard to Reach, 2 October 2023, p.47.
[8] Op. cit., p.4
[9] Ofcom, op.cit. p.5.
[10] DSIT, Wireless Infrastructure Strategy, Chapter 3, 11 April 2023.
[11] DSIT, £40 million fund launched to unlock 5G benefits across the UK, 31 July 2023.
[12] UKRI, Major future telecoms research boost announced, 22 February 2024.
[13] Ofcom, Statement: Improving broadband information for consumers, 13 December 2024, p. 17.
[14] Ofcom, Proposed Plan of Work 2024/25, 15 December 2023, p. 10.