There’s little doubt that the UK economy will need all the help it can find to recover after COVID-19. There has been plenty of discussion about the new business and societal opportunities that 5G can create or enhance, like Smart Cities, connected cars, fully-automated factories, virtual healthcare, last-mile parcel deliveries by drone, and much more. However the UK Department for Digital, Culture, Media and Sport (DCMS) has recognised that 5G rollout – and hence the potential benefits 
of the technology –may be delayed by up to three years due to the Government’s decision to compel UK operators to remove Huawei equipment from their networks by 2027. The effects of this delay, and the additional costs to mobile operators and the UK economy, are the subject of a new report by Assembly Research that was commissioned by Huawei.
The difference with 5G compared to previous generations – as well as its sheer speed and better latency – is its ability to adapt to give exactly the type of connection needed for each of these diverse applications, using a process known as network slicing. High-speed, low-latency mobile broadband could bring ultrafast connections to the last few rural areas that can’t be reached by fibre, and provide the ubiquitous connectivity that autonomous vehicles will need. At the same time, 5G can provide the capacity needed to connect all the individual sensors and switches that will be required to make the massive Internet of Things (IoT) a reality, even though most of these ‘Things’ will not need all of 5G’s headline speed and bandwidth.
Not surprisingly, people are asking, “Why can’t the UK make its own 5G infrastructure?”. It’s true that up to the turn of the millennium the UK had its own thriving telecoms manufacturing industry, supporting domestic mobile operators as well as exporting to the rest of the world. Names like Racal Telecom, Motorola, and Lucent Technologies were all making base stations here in the 1990s, and we also had a number of indigenous cellular antenna suppliers, but their UK operations are now mostly consigned to history. The bursting of the ‘dot.com’ bubble, combined with globalisation (and some rather short-sighted business decisions), means that pretty much all of this capability has since been shut down or moved elsewhere in the world. There are several smaller companies and recent start-ups that are working on equipment for the new OpenRAN open standard, but it will take a while for this to make an impact. Also, while the added competition element has the potential to reduce equipment costs in the longer term, this may well be outweighed by the escalated cost of system integration to get everything working together smoothly. DCMS’s Telecoms Diversification Task Force is due to publish its strategy by the end of 2020, but it is difficult to see how there will be a quick fix available to compensate for the exclusion of Huawei.
In addition, Huawei has been – and in many cases still is – deeply embedded in some of the UK’s fundamental 5G R&D projects including the 5G Innovation Centre (5GIC) at the University of Surrey, where Huawei is a Platinum Founding Member.
Assembly Research has analysed the effects that the predicted three-year delay could have on the UK economy and the Government’s policy of ‘Levelling Up’ less prosperous parts of the country by reducing emphasis on London and the South-East.
The report identifies that 5G has the potential to create a £108bn economic uplift to regions outside the South-East, and to create more than 350,000 jobs. These jobs would not necessarily be associated with the roll-out itself, but with the use cases 5G would enable. These could be in new technical disciplines like robotics, telehealth and smart grids, but would also enable non-tech businesses to grow and flourish. This could be particularly important in re-framing the industries worst hit by the pandemic, for example by offering new and safer ways for entertainment venues and retailers to interact with their customers.
At a more granular level, the report has singled out Northern cities that are most likely to be negatively affected by a 5G delay, including Leeds with a potential for £2.35bn uplift and an extra 8,200 jobs and Manchester with a massive £6.44bn potential benefit and 22,475 jobs. Cities in the other three UK nations, including Glasgow, Belfast and Cardiff, also stand to lose out significantly.
The ambition to level up the UK has already been set back by the Covid-19 pandemic, with higher infection levels, and consequently higher tiers of restriction, being disproportionately imposed in the North and Midlands. The requirement to swap out the 5G infrastructure vendors at the same time as trying to close the ‘Digital Divide’ by rolling out further capacity in these areas – and as well as attempting to recover from the current crisis – just compounds these problems. Add to this that 5G deployment is already more advanced in London than many other areas, and the re-balancing strategy starts to look increasingly precarious.
