In the UK, we are seeing the first signs of next generation access deployment, for example the Digital Region project in South Yorkshire and a new housing development in Ebbsfleet Valley, part of the Thames Gateway project in Kent. In some countries, next generation access networks are already being deployed more widely. This has required operators to make risky investments, often relying on the predicted success of the new, untried, products that the networks will support. In each case however, there are commercial, geographical or political factors which are not features of the UK context that have led operators to deploy new access networks. These include:
- current generation broadband services which appear less able to meet most customer’s needs at the moment compared to the UK;
- greater scope to generate additional revenues from services such as pay TV, whereas the market is already relatively mature in the UK; and
- relatively lower deployment costs of next generation access than in the UK, in part due to more densely populated urban areas.
It may therefore be that the efficient deployment of next generation access is simply earlier in some other countries than in the UK. We do not yet see evidence that the UK will be significantly disadvantaged economically or socially as a result. It is important that we continue to monitor the situation closely for any new evidence that would change this view. However, we continue to think that promoting investment which is timely and efficient in the context of the UK market is the correct approach.