Vodafone’s mammoth deal with Virgin Media O2 is not just a business transaction; it represents a pivotal moment for the UK’s digital future.
This deal is a big leap closer for Vodafone to reach its £15bn merger with Three as it mitigates concern from the competition regulators over a monopoly of UK mobile network infrastructure.
If approved, the Vodafone-Three merger could bring £5bn per year in economic benefits by 2030.
The rollout of 5G is crucial for the UK’s economic success. It boosts productivity, creates jobs, supports startups, and enhances global competitiveness. Despite being the 6th largest economy, the UK lags in mobile download speeds, dropping from 44th to 51st place globally in 2023. In comparison, several European countries including Denmark, France, Romania, Spain, Monaco, Switzerland, and the Netherlands, rankin the top 20. This disparity highlights the urgent need for the UK to catch upand leverage 5G technology to its full potential.
The Vodafone-Three merger is vital for growth, and the new Labour government must capitalise on this to stay competitive. The previous government warned that failing to adopt 5G effectively could cost the UK up to £159bn by 2035. Labour did recognise this in its manifesto saying there needs to be a renewed push to roll out the infrastructure to support this connectivity. Ironically however, the manifesto only referenced ‘5G’ twice.
We know planning and delivering large-scale necessary digital infrastructure is not a simple business and is often overlooked. Connectivity should be viewed as a utility, emphasising its importance. This perspective underscores the necessity of treating digital infrastructure projects with the same seriousness as other essential services like water and electricity.
A survey conducted by Cluttons and YouGov revealed that nearly three quarters of Labour and Conservative MPs said that planning reforms were necessary to help speed up this roll out. However, communication is also a barrier to success. While most MPs see the benefits of5G, few than one in five (19%) believe their constituents understand its advantages and the necessary infrastructure. This gap in understanding is asignificant barrier to progress.
Misleading information about 5G, especially during the pandemic, has created confusion. Some conspiracy theories falsely linked 5G technology to the spread of COVID-19, causing public mistrust.
This disconnect among network providers, central government, local authorities and local communities hinders progress making it more challenging to smooth the path for accelerated progress – another hurdle for the Vodafone-Three merger.
The Government now needs to implement a large-scale national campaign that includes funding to make more information on 5G available to many more people across the country. This is supported by MPs, with some 61% agreeing that a government-led information campaign on the benefits of enhanced digital connectivity was important when ensuring the roll out of gigabit broadband and meeting 5G targets.
One way this can be achieved as highlighted in our recent report, Connecting Today for Tomorrow, is to employ a Digital Champion in local authorities. An individual or a team who serves as the strategic leader, unifying various departments (such as planning, highways, and property) within a local authority and external stakeholders, including communities and operators. But creating this role costs money, and as local councillors told us in our survey, money is tight. Central funding for this role would be a game changer.
Labour’s role is crucial in facilitating this transition. In addition to a focus on digital connectivity in their new National Planning Policy Framework, the Government must work closely with telecom providers, local authorities, and communities to address concerns and promote the benefits of 5G. This collaborative approach can help overcome resistance and ensure that the UK fully embraces the digital future.
John Gravett is Managing Director at Cluttons
