Delay to 5G rollout will cost taxpayers £2 billion, report finds

Subsidised 4G expected to maintain its status as the key connectivity solution for a substantial part of the decade

The two-year delay to the 5G network rollout in the UK is expected to cost taxpayers an additional £2 billion, according to a new report from the Centre for Policy Studies (CPS).

The report predicts that, despite the progressing availability of 5G, 4G is to maintain its status as the key connectivity solution for a substantial part of the decade, a technology that is currently being heavily subsidised.

Based on findings from Cisco, published in March of this year, suggest the UK will be behind only Japan and China in the percentage of devices and connections on 5G by 2023 – at 19.5%. However, estimates revealed that 4G connections will outnumber 5G ones by four to one worldwide.

The new CPS report, which was written by former government advisor and BT head of consumer network communications Alex Jackman and CPS head of business Nick King, found that “over £2bn of public money is supplementing sizeable private investment in civil engineering projects to support 4G mobile networks”.

“The impact of that investment has already been depleted and delayed by the phased exit of Huawei”, which the report predicts will be a “geopolitical problem that could yet grow in magnitude”.

At the beginning of the year, the UK granted Huawei a "limited" role in its 5G infrastructure, excluding it from all safety-related and critical networks and only allowing it to supply up to 35% of the hardware that connects devices and equipment to mobile phone masts. However, this decision was legally overturned in July, when the government banned Huawei equipment from being used in the infrastructure and giving telecoms firms a 2027 deadline for its removal.

“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," Huawei VP Victor Zhang said, commenting on the CPS’ findings.

The report also found that, if the government exceeded the 2027 target by a quarter, it would add £41.8 billion to the UK’s economic output between 2021 and 2027.

In order to do so, 5G would have to reach “roughly 64% of the population” by 2027, instead of 51%.

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