UK will see the benefits that superfast broadband access can bring in time, new report says

The Economist Intelligence Unit (EIU) said that a study it undertook into the "myths and realities about the UK’s broadband future" revealed that merely having access to superfast broadband will not, in itself, generate jobs, growth and other benefits that the Government has identified as being associated with the rollout of speedier internet services.

"While the gains from significantly faster connectivity will indeed be sizeable over time, a good dose of reality is also in order," EIU said in its report, (25-page / 1.09MB PDF) which was commissioned by Chinese telecoms firm Huawei. "Existing networks are capable of delivering many of the services anticipated over the next few years. Obstacles are also numerous to utilising even the existing technology capabilities to good effect, including a shortage of skills and resistance to change."

"In this context, some of the expectations about the early returns from superfast broadband rollout in the UK may be overstated," EIU added. "Over time, powerful new applications will emerge. But in getting there, other things will be needed beyond faster networks: new skills, regulations that make the business environment more competitive, capital to support business growth and more."

The UK Government has set out a goal of having the fastest broadband services in Europe by 2015. It wants at least 90% of the country to have access to an average broadband speed of at least 24Mbps. The current average is 9Mbps.

The Government's bid to achieve its broadband speed targets are dependent on improvements being made to existing fixed line broadband infrastructure and mobile broadband networks. Everything Everywhere (EE) has today launched its '4G' mobile service offerings to the UK market, whilst other operators are expect to deliver rival 4G services from early 2013 following a frequency spectrum auction later this year.

Whilst research has claimed that investing in superfast broadband networks can create hundreds of thousands of jobs and increase the UK's gross domestic product by billions of pounds within the first few years of deployment, EIU said that some of those projections may be "fanciful".

EIU said that there will be a short term boost to jobs as work is undertaken on improving the infrastructure for the deployment of new superfast broadband services but that a longer term jobs boost from the operation of 4G in the UK was less certain. It said "local stores" could suffer job losses because of consumer access to alternative e-commerce opportunities resulting from superfast broadband access, for example.

It said that benefits to private sector businesses and to organisations in other sectors, such as health and education, would be derived from superfast broadband access once people learn how best to utilise the technology, among other things.

"What too often blocks progress is a shortage of suitable digital skills, institutional resistance to change, unreformed processes and a lack of pervasive basic broadband access, among other things," EIU said. "Deploying superfast networks will not by itself resolve these problems."

"In this context, some of the projections cited at the start of this report – especially those regarding the superfast broadband impact on the British economy and jobs over the next five years – appear fanciful. Government and business in the UK naturally wish to embrace any technology-driven boost to an otherwise weak economic growth outlook. The rollout of superfast broadband, both the mobile and fixed variants, will help, but it would be unwise to expect early returns," it added.