Upcoming legislation to transform the UK telecoms market
With market consolidation leaving just three key providers in global telecoms, the UK government is using new legislation to drive down costs, encourage innovation and open the market to new vendors.
Through disaggregation and the adoption of open standards, the government hope to reinforce resilience in the supply chain by creating interoperability between subsystems from different vendors.
The National Security and Investment Bill and the Telecom Security Bill look set to transform the telecoms landscape and develop opportunities for UK-based companies.
The National Security and Investment Bill seeks to prevent the loss of sovereign access to new technology when startups transfer to foreign ownership and are offshored. The Telecom Security Bill is designed to remove ‘high risk’ vendors from UK infrastructure and gives new powers to the DCMS and OFCOM. But it also seeks to diversify the vendor base and proposes a three pronged strategy to be implemented by a Diversification Taskforce.
First the strategy aims to support existing suppliers to build resilience and support their transcformation into the new telecoms landscape. Second it aims to attract new vendors and third to accelerate the deployment of open-interface solutions. This is designed to reduce the UK’s dependence on a small number of vendors and work towards the long term goal of creating a more innovative and open telecoms market.
The strategy will be underpinned by a £250m investment that will fund a new National Telecom Laboratory and SONIC (SmartRAN Open Network Interoperability Centre) which will be run jointly with Digital Catapult. The ultimate aim is to support market diversification after the UK was left reliant on just Ericsson and Nokia
As the number of vendors has decreased so they have taken steps to protect their slice of market share from new entrants. This has left the UK, US and Europe dependent on Ericsson, Nokia and Huawei. The removal of the Chinese firm from the UK network has prompted a rethink of the way telecoms and the 5G rollout will be delivered in Britain.
Companies from the UK are currently supplying world-leading technologies around the globe including satellite communications, quantum encryption, digital chip design, optical transceivers used in fibre communication and software development.
The opportunity for UK companies is substantial with the FTTP and 5G rollout estimated to be worth £50-100bn in the UK alone. As Open RAN and other open standard technologies are adopted globally there are exciting export opportunities for UK-bred technologies.
The transformation of the current UK telecoms market into a diversified supplier base with enhanced security will require innovations in funding as well as the continuation of successful inititatives like the test beds and trials. Cyber certification and direct procurement of infrastructure could be other useful interventions.
If the new legislation succeeds as it’s designed to, the future structure of the UK telecoms market could be influential worldwide. It’s a new opportunity for a global Britain to influence standards as global government’s continue to make data security a priority.