Autumn Budget 2018: Austerity moves aside as discipline takes over

Autumn Budget 2018: Austerity moves aside as discipline takes over

Today’s Autumn Budget announcement yielded few surprises for the telecoms sector. Chancellor Philip Hammond, in what should be the UK’s last budget as part of the EU bloc, revealed that £200 million had been earmarked for programs to drive out fibre networks rurally across the UK (starting with the Borderlands, Cornwall and the Welsh Valleys), in line with the Government’s ambition to see nationwide coverage of full fibre by 2033, with 5G by 2027.

Overall, the National Productivity Investment Fund is increasing to £37 billion, with £1.6 billion of new investment going to the Government’s Industrial Strategy.

How far this money will go towards reaching nationwide coverage is debatable, given that the Government itself forecast that it would take around £30 billion to roll out full fibre across the country – total deployment capex assuming a competitive model.  For the areas that they thought likely to be otherwise unviable commercially (determined in the FTIR to comprise around 10% of the premises across the UK), it was determined that additional funding in the region of £3 billion – £5 billion would be required.  £200 million from the current Superfast Program had already been designated to prioritise with a fibre solution the areas of the country not currently reached by superfast coverage.

Last year’s Autumn Budget saw a £190 million Challenge Fund designed to help get fibre out to local areas through its Local Full Fibre Network (LFFN) which formed part of the Government’s then £32 billion National Productivity Investment Fund. The LFFN intends to create ‘fibre spines’ along major transport routes and public building networks and positioning areas of community importance as full-fibre “hubs” which could then enable connectivity out to local communities.

The money announced today will see an extension of this existing project as the Government continues to focus on its “outside-in” approach to nationwide fibre coverage.

Also of interest to the sector is the Government’s intention to levy a 2% Digital Services Tax so that online tech giants generating high enough revenues in the UK will be required to pay tax, with the Chancellor predicting that £1.5 billion over 4 years will be raised.

Also announced in the Budget are two consultations: New Build Developments: Delivering gigabit-capable connections and Ensuring tenants’ access to gigabit-capable connections.