We celebrated the New Year but what can we expect in the world of telecoms over the next 12 months? Will we do better than in 2017?  You may remember that the conclusion of  many 2017 reports was that the UK was doing badly in terms of developing its telecoms infrastructure and Lord Adonis recently told Ofcom it must tackle the UK's broadband blackspots. In a world where the Internet of Things and Artificial Intelligence will continue to place more demands on our technology infrastructure what will 2018 bring?

Longer lasting batteries

Improving battery is one of the factors that will be key to the success of the Internet of Things (IOT) and Artificial Intelligence (AI) as we become an always connected society. So, Samsung's research into graphene batteries is exciting. The potential is a battery that could fully charge in just 12 minutes with up to 45 percent more capacity. Sounds like a return to the old Nokia phones that were relaunched in 2017!

AI chips for smartphones

AI is set to become a regularly heard phrase in 2018.  In Autumn 2017 Google introduced AlphaGo, a program which can learn and master the mind-boggling Chinese game of Go in just three days. Google has a plan to put itself on an "AI first" footing and embed AI capability in all Google products and services. Others will surely follow; and the competing manufacturers will be aiming to place AI chips in their smartphones as soon as possible.

Flexible handsets

Apple is now developing a bendy iPhone. The company has filed a US patent application for a phone with "a flexible portion that allows the device to be folded." Microsoft was recently granted a patent for a tablet device that folded up to become a phone. And it is strongly rumoured that Samsung is developing a folding phone to be called the Galaxy X.

Landlines

SIP and VoIP will continue their relentless advance to replace ISDN; more businesses are now connected by IP rather than analogue. But despite the claims of pushy, unscrupulous providers - analogue will be here until 2025 so those businesses still to switch over have plenty of time. But, watch out for signing new long term deals.

The UK's telecoms infrastructure

This all sounds very exciting until the hype of new advances meets the reality of the UK's antiquated and creaking infrastructure. In 2017 we achieved rankings of 54th in the world for 4G coverage, 31st in the world for average broadband speeds, and bottom of Europe for the rollout of Fibre to the Premise (FTTP).

If the UK is to reap the benefits of the new technologies then this has to be addressed. The current plans are wholly uninspiring. It can only be hoped that the Government and the regulators will take a tougher more interventionist approach in 2018; letting the operators solve the problem clearly has not worked.  

The operators seem to have little desire to solve the problem themselves. In terms of broadband we are the poor man of Europe. BT claims to have 345,000 premises connected to FTTP, but almost 30% of them are in Cornwall as part of an EU funded project.   

BT's published plans show they will barely have achieved 10% by the end of 2020. On average, the rest of Europe achieved that in 2016!  

The official targets are outdated and, even if achieved, will still leave us bumbling along in the slow lane. The Government wants everyone to have access to a minimum of 10 mbps broadband by 2020. 10 Mbps may have been reasonable when the target was set several years ago, it is now no longer fit for purpose. It is not suitable for the growth of the Internet of Things and the steadily increasing range of streaming services. By 2020 The EU Digital Agenda goals intend to deliver at least 30Mbps for all. It will be no surprise that South Korea and Japan expect to have 5G working by 2020, whereas we hope for some coverage by 2025.

So, our relative position as the slow man of Europe is unlikely to change. There are regional variations thanks to providers other than BT, for example, B4RNGigaclear, Hyperoptic, KCOM and other providers of "full fibre". Inevitably this means a postcode lottery for getting decent FTTP broadband as shown in the table below.

Broadband penetration UK 

Let's focus on 21st century technology

The Government has made much of HS2 and HS3 schemes to connect cities. However, this is putting the funding into railways, which let's face it, was the Victorian's communications breakthrough! Our politicians should be prioritising 21st century communications, reducing the need for travel and reducing the need to concentrate businesses in towns. Let's get the infrastructure that will allow businesses to be distributed more widely around the UK.

Mobile presents a similar picture. Who remembers the "agreement" struck between the Government and the mobile operators in 2014? This gave the operators three years to improve coverage and remove not-spots. In return the Government did not enforce roaming in the UK. Sajid Javid, then Culture Secretary described it as a landmark deal.  https://www.gov.uk/government/news/government-secures-landmark-deal-for-uk-mobile-phone-users

Under the agreement, in order to improve mobile coverage, all four of the mobile networks collectively agreed to:

  • a guaranteed £5bn investment programme to improve mobile infrastructure by 2017;
  • guaranteed voice and text coverage from each operator across 90 per cent of the UK geographic area by 2017, halving the areas currently blighted by patchy coverage as a result of partial ‘not-spots';
  • full coverage from all four mobile operators will increase from 69 per cent to 85 per cent of geographic areas by 2017;
  • provide reliable signal strength for voice for each type of mobile service (whether 2G/3G/4G) - currently many consumers frequently lose signal or cannot get signal long enough to make a call; and
  • make the deal legally binding by accepting amended licence conditions to reflect the agreement - it will be enforceable by Ofcom.

How well have they done? In March 2017, the National Infrastructure Commission concluded that the UK is being held back by poor mobile phone connectivity. It called for an end to "digital deserts" in places that should have adequate signals, such as rail routes, roads and city centres.

Tougher measures are needed

The lack of progress is a sign that the Government needs to get tough and allow free roaming in the UK - as we have when we travel in Europe. Let's hope the Government and its regulator will stop hesitating and make some tough decisions.  

In 2017 Ofcom decided not to fully separate 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.  The planned penalties for missed appointments were watered down and not made automatic. Openreach remains an organisation that no end user can talk to directly. 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 costs of calling 084 and 087 numbers wherever they were promoted. Yet daily there are examples of companies, large and small, blatantly flouting the rules. And when has Ofcom ever fined ever one for doing so? So far, never.

It had to rely of 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.  A recent report by the Economist said it expected average revenue per user (ARPU) to suffer as result of increased competition. In 2018 they expect ARPU across our 60 markets to fall by 2.3% for mobile operators, and by 11.5% for fixed line. The competition in the consumer markets is coming from providers such as WhatsApp and Viber. A survey recently showed that almost a third of people do not use their mobiles for Voice and the levels of Texts is down by almost 40% since 2012. The growth of VOIP and SIP is eating into the profits historically generated by ISDN.  

This is the conundrum; huge capital investment is required to create new infrastructures to generate new revenues. But often the new revenues are lower than the revenue from the old technologies they replace. A survey of operators, conducted by Ericsson, found that 86% were viewing IOT as key for monetarising revenues from 5G.

Adding in the extra costs of improving security as cyber threats grow and regulations, such as GDPR, then there is the potential that the situation will get worse, not better.

Predictions for 2018

Unfortunately, I think 2018 promises to be more of the same, unless drastic action is taken: lots of stories and hype on ‘technology taking over our lives'; more reports showing how badly off the UK is compared the rest of the world when it comes to telecoms; politicians spouting soundbites promising action but then doing nothing tangible; and more confusion for businesses on where to spend their technology pounds.

My wishlist

I'm sorry if this sounds gloomy. Here is my wish list of how to make a difference:

1.     Acknowledge the 2014 mobile deal has not led to the required improvement in mobile coverage and allow 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. With the resellers being forced to reduce their prices by half as well

3.     Raise the Government minimum speed target annually to reflect changing demands

4.     Set some bold targets to offer the best infrastructure in Europe. This is 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 the align other laws, such as no automatic rollovers and transparent penalties

6.     Make all consumer broadband, phone line and mobile advertising prominently carry the latest Ofcom stats on complaints received

7.     Properly fund the rollout of FTTP and 5G. Have the target to become world leaders by 2020 - not world laggards. It could be funded it by scraping or delaying HS2 perhaps 

8.     Link the funding to heavy penalties, including loss of licences for any failure to deliver

9.     Give tax breaks for infrastructure - in the same way the oil and gas industry has benefitted from generous tax breaks for investing in the North Sea - do the same for infrastructure

We have to break out of the cycle. We won't get better results by continuing on the same path. We have to begin doing some different things in 2018 to start gaining the improvements we need for 21st century life and 21st century business.

For more information visit  www.equinoxcomms.co.uk