While proposing nothing as radical as former leader Jeremy Corbyn’s plan to nationalise BT Group’s infrastructure division Openreach, Keir Starmer’s labour has indicated several policies that change the landscape for telecoms and digital infrastructure firms in the UK.
Mobile Market
In its manifesto, Labour says that under the Conservatives, investment in 5G has fallen behind other countries and it will make a renewed push to fulfil the ambition of national 5G coverage by 2030.
How exactly it plans to do this is unclear so far, says James Robinson, a senior analyst at UK-based market research firm Assembly Research.
“There isn’t a level of detail yet to say exactly what they plan to do,” he says. But Robinson does point to comments made by Peter Kyle, who is likely to become the UK’s Secretary of State for Science and Technology at London Tech Week.
“A Labour government will lead by example by looking to donate appropriate laptops, tablets and phones to digital inclusion schemes when they are no longer used by departments. Once they are cleaned up and secured they can be reused by people who need them instead of being put in a landfill,” Kyle says in his speech while pledging to work with charities such as the Good Things Foundations to help close the digital divide in the UK.
Robinson thinks this is essential for a new government to focus on.
“We haven’t had a national digital inclusion strategy since 2014,” he observes. “While that should focus on the rollout of broadband and 5G on the access side, there will be other areas for that for their next government to think about.”
This includes affordability of connectivity services, access to the necessary devices and digital literacy skills, all focus areas that Kyle pointed to in his address.
One of the biggest talking points in the UK’s mobile market at the moment is the proposed merger between Three UK and Vodafone UK.
The merger has already been approved at a parliamentary level and is currently sitting in a phase 2 review with the competition and markets authority.
Robinson doesn’t expect a change in government to impact the outcome of the merger, but Ed Rea, director, co-founder and TMT lawyer at UK law firm Arbor Law says that Labour’s proposed policies around consumer protection and outlawing mid-contract price-hikes could be at odds with a reduction in the number of mobile operators in the UK from four to three.
Critics of the deal say that it will lead to a price rise for consumers, but proponents of a tie-up say it will lead to more investment in the UK’s mobile networks, and specifically open up capital for investment in 5G.
“The comments that have been made are very much in support of competition,” Rea says.
“There’s definitely potential that a Labour government could look at the potential price increases and take any opportunities to stop it happening,” he adds, although Rea also notes that ultimately the decision will not sit at a political level to begin with.
“If there is a sniff of consumer price increases it will be looked at very closely and won't be waived through if that’s a risk,” he says.
But a merger could also allow more investment and better service, “so it becomes an economic discussion rather than just a political one,” Rea adds.
In addition to rolling out its 5G network, the UK is also focused on filling 4G blackspots as part of its Shared Rural Network (SRN) program.
“The government has been keen to encourage all the mobile operators to work with each other to achieve the targets and it's a bit like herding a bunch of cats, they've all got their own interests,” Rea says.
The project is running a few years behind schedule and Rea says Chris Bryant, the current shadow minister for creative industries and digital, has made comments about speeding up the rollout of the SRN. but again, no concrete plan or details have been revealed.
Broadband
Bundled in with its comments about the slow rollout of 5G, Labour has criticised the effort made in the country under the Conservative Party to rollout gigabit broadband.
Along with nationwide 5G, Labour has pledged to make a “renewed push” for full gigabit broadband by 2030.
Robinson notes that Ofcom launched its telecoms access review recently, a wholesale market review that covers the rules governing the fibre market in the UK, which will cover the period between 2026-2031.
It follows the 2021-2026 review, that encouraged alternative network providers (altnet) investment and simultaneous investment from BT’s Openreach.
“Ofcom said this would not be a five-year process.,” Robinson says. “I expect the next Ofcom market review decision will be a continuation of this pro-investment framework, with more tinkering around the edges rather than broad changes.”
Rea thinks that a big change is coming in the altnet space. Following the deregulation of the fibre market in 2017, a “scattergun” approach was taken with up to 300 altnets being launched.
Seven years on, winners and losers have emerged, and Rea expects the trend of consolidation that has already begun to speed up.
There has also been a lot of overbuild, or multiple fibre networks being deployed in the same area, which Rea says is inefficient and not a good use of taxpayer money.
Overbuild has also raised the ire of Bryant. Inferring from Bryant’s comments on the matter, Rea believes “there probably will be some intervention by a Labour government.”
“They’ll look at this and say we’re supporting altnets via funding from the gigabit scheme, and they are building in places where other telcos are building. I wouldn’t be surprised if something was done to reduce the incentives for this happening.”
As a result, pressure to stop building in certain areas is likely further to increase the rate of consolidation in the market.
AI
The UK has already set out ambitions to become a global leader in AI, with the current government committing £20 billion to research and development spending, offering R&D tax reliefs and outlining a commitment (if it is to stay in power) to continue to invest £1.5 billion in large-scale compute clusters.
It has also recently published a response to an AI Regulation White Paper, in which it outlined funding and tools to help regulators understand and monitor AI tools.
“The (current) government wants to take a pro-innovation approach to AI,” Robinson explains. “It doesn’t want to regulate the technology in a centralised way, it would rather take more of a principles-based approach that different sectoral regulators could apply in sectors that they oversee.
Labour, meanwhile, has pledged to replace a voluntary AI testing agreement between tech companies and the government with a statutory regime, under which AI businesses would be compelled to share test data with officials.
This brings its approach more in line with regulation in the EU, as opposed to the more pro-innovation stance taken by the US, for now at least.
“The UK has taken a light touch approach to AI regulation and that's been very much intentional as opposed to the approach across the EU where it's a case of let's get in and regulate now,” Rea explains. “There's been a whole debate about which approach is better,” he adds.
Rea expects Labour’s approach to AI beyond the points laid out in its manifesto to be more interventionist when it comes to protecting jobs and the social implications of AI.
With regards to the batteries of AI, and data centres, Labour has controversially signalled that it will allow sites to be built on green belt land, a ring of countryside around London that is protected from urbanisation and industrialisation spreading from the capital.
“This aligns with Labour’s ambitions to relax planning permissions and get building generally,” Rea explains.
