Autumn Budget ups investment in R&D and 5G
Written by: Sam Fenwick | Published:
Philip Hammond, the chancellor of the exchequer

The Autumn Budget includes £2.3 billion in additional investment in R&D in 2021-22 from the Northern Powerhouse Investment Fund (NPIF)

In addition, the chancellor of the exchequer, Philip Hammond, said: “A new tech business is founded in Britain every hour, and I want that to be every half hour. So today we invest over £500m in a range of initiatives from Artificial Intelligence, to 5G and full fibre broadband.”

He also announced that there will be a new Geospatial Data Commission “to develop a strategy for using the government’s location data to support economic growth.”

As far as funding for 5G is concerned, the government will invest a further £160 million from the Northern Powerhouse Investment Fund (NPIF) in new 5G infrastructure. The first projects to benefit are:

  • • £10 million to create facilities where the security of 5G networks can be tested and proven, working with the National Cyber Security Centre
  • • £5 million for an initial trial, starting in 2018, to test 5G applications and deployment on roads, including helping to test how [the UK] can maximise future productivity benefits from self-driving cars, building on the work already progressing on connected and autonomous vehicle trials in the West Midlands.

The government is also launching a new £190 million Challenge Fund that local areas around the country will bid for to encourage faster rollout of full-fibre networks by industry.

It will shortly consult on commercial options to improve mobile communications for rail passengers and will invest up to £35 million to enable trials. This will be used to: upgrade the Network Rail test track in Melton Mowbray; install trackside infrastructure along the Trans-Pennine route between Manchester, Leeds and York; and support the rollout of full-fibre and 5G networks.

Initial reaction from the digital and telecom industry appears to have been broadly positive, with much emphasis on the nature of 5G and its possible limitations.

“Phillip Hammond is right that investment is needed to secure the UK’s place at the forefront of a technological revolution, and we believe that 5G needs to be at the top of his priority list,” said Paul Bradley, 5G Strategy and Partnerships Director at Gemalto.

“5G is not just about a faster mobile connection, it’s a fundamental platform building block which enables digital transformation on all levels. 5G will underpin many of the advanced technologies that the Chancellor wants the UK to excel in, not least by ensuring that driverless cars can be alerted to dangers ahead in real-time communicate with each other.

“Any investment in infrastructure that will make 5G a reality is welcome – but it needs to go further than we did for 4G, which still does not have full geographic coverage of the UK. Many of these next generation technologies… will need ubiquitous connectivity which is suited to the use-case, even on a stretch of remote road where no people live. We need to have a plan that will deliver 5G services securely along a chain of trust to every corner of the UK, not just densely populated areas in the UK.

Nick Watson, VP EMEA at Ruckus said: “It’s refreshing to see government investment into connectivity, but 5G will take several years to become mainstream. While it may one day meet expectations, we need a solution now. Our big cities urgently need networks that can support the world class infrastructure that the government wants to build, so instead of holding our breath for 5G we should invest into Wi-Fi technology for a simple, cost effective solution.

“Using a shared communications spectrum (as the CBRS alliance is doing in the US), Wi-Fi can bridge the dead-zones of mobile coverage. Compared to 5G, these are significantly less expensive, easier and quicker to deploy as well as mobile network-neutral, benefiting operators and customers. UK consumers will get massive coverage expansion at little to no cost to the operators. This means we can take advantage of new technology, whether that’s driverless cars, transport improvements, or smart factories and cities.

Robin Kent, director of European operations at Adax, said that his company fully supports the additional £160 million in funding for 5G development, adding: “… 5G technology will support the huge growth of connected Internet of Things (IoT) devices and address issues for the devices themselves such as low latency and low power, and for certain applications, high reliability and strong security.

“However, the industry still needs to establish a business case for 5G. It’s all well and good promising faster download speeds to end-users and having this funding upfront to kick start infrastructure projects.” He also questioned “whether operators can ensure 5G works sufficiently to provide a good consumer experience whilst making money? With 5G theoretically 40 times faster than the hypothetical limit of 4G, it will take a great deal of expensive upgrading of the current infrastructure to fulfil its claims. But will end-users be willing to pay for a premium 5G service? We must establish who is going to foot the bill in the long run.

“We’re still a long way off from full commercial implementation of 5G networks but today’s news is without doubt a positive step in the right direction,” Kent concluded.

Phil Sorsky, international VP of service providers at global telecoms infrastructure provider, CommScope, said: “While the 5G roll-out will of course be important… there is still work to do to tackle coverage ‘black spots’. These won’t be addressed by 5G for several years after its launch, therefore these needs are likely to be met by LTE-A and LTE-Pro coverage for the foreseeable future.

“That said, we of course support any government’s investment in fibre connectivity. Access to fibre will become a key component for businesses across the UK, particularly in the run up-to Brexit, with companies even more under pressure to deliver on a global scale. With that in mind, it is critical that everyone across the country has the same access to the opportunities enabled by connectivity.”

Continuing the theme of Brexit, Alastair Masson, head of telco media, NTT DATA noted that the commitment of £500 million will go some way to making the chancellor’s promised to make the UK a hub of enterprise and innovation, before saying: “With Brexit looming, British businesses need every competitive advantage available. Delivering on connectivity is key. The Chancellor stated that he wants a new technology business to be founded every half an hour. This will only be possible with a focus on 5G and the UK's network infrastructure."

But what about SMEs – a size bracket that includes many radio dealerships?

Mike Cherry, the Federation of Small Businesses’ (FSB) initial reactions were that “Overall, this is a business-friendly Budget. The Chancellor’s vision for an inclusive economy includes a set of measures that will boost confidence across the small business community as they face extremely challenging trading conditions.

“1.5 million modest-earning small firms and the self-employed will be relieved that we have seen off a VAT tax grab that would have caused huge economic damage. Instead, FSB is ready to work with the Treasury to simplify an over-complicated tax that on average takes a business a whole week to administer every year.

“We welcome the careful approach to protect diesel van drivers while at the same time addressing air quality. We also welcome the fuel duty freeze, which is vital to so many local businesses for customers, suppliers and staff.

“FSB presented a series of reforms to the Chancellor to make the business rates system fit for the future, and we are delighted to see many taken on board to improve a tax that so badly undermines economic growth. We are particularly proud to see the elimination of the staircase tax, a victory that FSB has campaigned hard to secure over the last few months.

“The economic outlook remains extremely troubled, with high costs of doing business and inflationary pressures hitting confidence and deteriorating productivity and growth. New public sector headline investment will help, to scale-up the British Business Bank by two thirds as well as in research & development, local infrastructure, SME house-building, broadband and training. This must now be followed by practical detail in an ambitious Industrial Strategy next week.”

For a more in-depth analysis from the FSB see the full press release here.

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