Delay in 5G rollout will cost UK economy billions, report says

Delays to the rollout of 5G across the UK could cost the country tens of billions of pounds in lost economic output, a new report by the Centre for Policy Studies suggests.

It warns that challenges posed by legislation, the phasing out of Huawei equipment and the coronavirus pandemic are stalling the delivery of 5G and could prevent faster economic growth.

The report suggests that by 2027 as many as 11 million homes and businesses could be missing out on vital new digital connectivity, at a cost to the economy of more than £41 billion.

The research, entitled Upwardly Mobile: How the UK can gain the full benefits of the 5G revolution, says current planning rules need reform in order to speed out the rollout of 5G infrastructure, particularly in rural areas and industries hit hardest by the Covid-19 pandemic – such as manufacturing, construction and agriculture – who would benefit most from better connectivity.

Report author Alex Jackman, a former digital adviser to the Government, said: “Digital networks and the services they support have underpinned our resilience to Covid-19 and they will drive our recovery.

“By expanding them, we deliver not only immediate benefits but also the essential foundation stone for 5G.”

Using analysis by independent consultancy Policy Points, the report estimates that should 5G coverage reach a quarter more of the population than the Government’s current target of 51%, it could boost GDP by as much as £41.7 billion.

However, if delays continue, the incremental difference in GDP over the coming decade could be as high as £173 billion, it suggests.

“This is no time for the Government to be passive on the deployment environment – the difference between the UK as a 5G pioneer and ceding leadership to others is as much as £173 billion,” Mr Jackman said.

The research also argues that without the suggested reforms, the UK could miss its 2025 target for the rollout of gigabit-capable broadband across the country.

Former Trade Secretary Patricia Hewitt, who is chair of Speed Up Britain, a campaign group for better mobile connectivity in the UK, said the Government “needs to act now to avoid being left behind in the digital revolution”.

“There aren’t many low-cost ways to unlock serious economic growth, but small changes to the Electronic Communication Code could unlock billions of pounds in our economy, drive the UK’s Covid-19 recovery, and deliver significant regional growth,” she said.

Responding to the report, Huawei said it reinforced its argument that removing the Chinese firm from UK 5G infrastructure would negatively impact the country.

Victor Zhang, Huawei vice-president, said: “This is the latest of a series of high profile reports all of which agree on one thing: that removing Huawei from Britain’s 5G network will cost the UK billions in economic benefits, significantly push up costs for businesses and consumers and will likely leave millions with slower connectivity while expanding the digital divide.”