Reaction
Robert Finnegan, CEO of Three UK reacted to the news of Labour’s win, reaffirming his belief that a merger between Three UK and Vodafone would benefit the UK.
He said: “The new Government has recognised the importance of 5G connectivity in driving economic growth.
“The UK’s connectivity is way behind where it needs to be and we look forward to working with them to address this. The merger of Vodafone and Three enables us to invest £11bn in a dedicated 5G network that would give a huge boost to companies and individuals across the country.”
Analysts from Assembly Research (Assembly) note that relatively little was said about telecoms during the campaign, unlike in 2019.
What was said, though, lamented the slow rollout of gigabit broadband and low 5G investment.
“A commitment to maintain the growth duty extended to Ofcom under the Conservatives could see changes to economic regulation that better supports growth and investment,” the research firm said.
“Some may be left underwhelmed with a renewed push to meet already-agreed connectivity targets but will be encouraged that Labour has progressed from the more radical idea to nationalise broadband, recognising the role competition plays in driving investment and rollout.
Central to Labour’s overall campaign has been the need to reignite the UK economy to drive productivity and create jobs.
“It sees investment in infrastructure as key to this mission but that red tape is holding things back,” Assembly says.
“Promising to designate data centres that support AI and cloud computing as ‘nationally significant’ and easing planning rules for building on protected green belt land are clear commitments to this cause.”
“Certainly, any planning reform that also helps speed up the deployment of networks would be music to the ears of operators, who have long called for more support of this kind.”
The AI impact
For Labour, a big theme to contend with in the coming years will be AI. In their election manifestos, both Labour and the Conservatives committed to facilitating growth in the UK AI sector through tactics such as building more data centres and driving adoption in the public and business sectors.
“However as both parties are aware, the ascent of AI will increase the occurrence of AI-based attacks from bad actors, and as such increased cyber security measures must be a priority,” according to a spokesperson from data protection platform Protegrity said.
Gartner research states that around 80% of enterprises will have used Generative AI, Application Programming Interfaces (APIs) or models by 2026.
“As AI is a disruptor and presents breakthroughs in the ability to process logic differently, it is attracting attention from businesses and consumers alike, which creates the potential for their data to be put at risk,” the spokesperson added.
“Meanwhile, the cybercrime industry will be quickly adopting AI technologies, informing more innovative AI-based attacks.”
As such, Protegrity says that through 2024, there may continue to be an increase in AI-based attacks until businesses and government bodies can put in place robust and ethical AI cybersecurity measures.
The importance, at this time, will be in employing safe data practices so private information is always protected.
“This drives the need for stringent data privacy controls and regulations to safeguard individual information and ensure that even when using AI, an individual’s data is not exposed publicly, and bad actors won’t have easy access to it.”
Protegrity advocates for a data-centric approach as the best approach. The firm says if organisations identify what data they have, what’s important and who needs to see it, they can restrict access and anonymise sensitive data through processes such as encryption.
“Further, if the correct preventative measures are taken by using safe data privacy practices, training employees in safe AI use, and adopting an internal zero-trust approach, people and businesses will no longer be viewed as relevant targets to hackers,” the spokesperson adds.
Assembly adds that Labour seems particularly alive to current issues in the digital economy, and it's here where we’re likely to see change first.
Building on the Online Safety Act, banning explicit deepfakes and giving coroners the power to see information held by tech companies after a child’s death are all set to be enacted quickly.
“Labour also looks set to take a tougher stance on AI, moving away from the recently established voluntary testing agreement to a statutory regime for the most powerful foundation models,” analysts said.
“Unlike the Conservatives, nothing was said on the banning of smartphones for under 16s, however, the party has said it is open-minded about the banning of social media for this age group. Given the practicalities and contentiousness of such a policy, it’s not likely to happen as quickly given the need to widely consult.”
Price hikes
Though there is a sense that Labour may bring a greater focus on consumer protection to the Government, the manifesto did not mention some of the affordability-related issues that MPs have frequently discussed.
“A previous promise from Labour to crack down on mid-contract price rises has already been instigated by Ofcom,” Assembly analysts said.
Assembly note that some previous Labour statements didn't feature in the election campaign, including pushing the regulator to tackle so-called ‘loyalty penalties’ faced by telecoms customers that don’t switch.
With the exception of a planned fund in Scotland to help over-75’s pay for their TV licence or telecoms bills. a move from voluntary to mandated social tariffs for broadband was also emitted.
“With an ease in cost-of-living pressures, these may naturally fade away as priorities,” Assembly said.
Questions for fibre?
Chris Godsmark, a managing director at advisory firm Houlihan Lokey’s Technology Group believes that Labour’s victory will lead to many questions for digital infrastructure providers, and in particular, rolling out competing fibre networks.
“A new Government means a new opportunity to engage in strategy and policy, and given the huge majority, perhaps a longer-term strategic outlook,” Godsmark says.
“However, the Labour manifesto is short on detail on digital infrastructure which is surprising given the focus on boosting economic growth. There is a reference to giving investment a push but with more around 5G than fibre.”
The 14 years of Conservative governments saw the rollout of fibre to the cabinet by BT instead of the full fibre rollouts in other European countries.
To put this into context, Godsmark says, around 30% of households are currently connected to full-fibre, whereas in Spain and Portugal, there is almost universal coverage in urban areas.
“The UK policy – from Government and the regulator – was to encourage full competition rather than some sort of regional build model like the cable industry in the 1990s,” Godsmark says.
“We all know how this played out, with many competing altnets over building each other and a generally negative sentiment by infrastructure investors to further build.
According to Godsmark, the current uncertain state of the UK altnet market is a direct failure of Government and regulatory policy.
“Whether Labour can address what amounts to a crisis of confidence in UK fibre investment is an open question. We don’t know the answer.
“But I do hope that the new Government will invest in digital infrastructure as a priority and somehow foster incentives which encourage a shift from the current boom and bust approach in the market. “
