5G Rollout Delay Could Result in Loss of Country’s Economic Output by £41 Billion

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5G Rollout Delay Could Result in Loss of Country’s Economic Output by £41 Billion

 5G Rollout Delay Could Result in Loss of Country’s Economic Output by £41 Billion

Summary

  • British think tank, Centre for Policy Studies has claimed that the recovery of the British economy from the coronavirus pandemic will be slow without the aid of fast 5G communication networks.
  • The CPS report has stated that there is a risk without a faster 5G roll-out and there could be loss of economy output by £41 billion
  • The roll-out of the 5G networks in the country faced a minor roadblock this year when the government decided to ban 5G telecom equipment supplied by Chinese Telecommunication equipment Major Huawei.

Accentuating the ability of the powerful 5G telecommunication technologies' ability to fast pace the state of recovery, Centre for Policy Studies (CPS) has come out with a report advocating an early implementation of the technology.

Authored by former government advisors Nick King and Alex Jackman the report states that the recovery could fall short by £41 billion without the next generation communication network, which could run up to £173 billion over the next decade in terms of lost economic growth.

This report comes in the wake of the government banning 5G telecom equipment supplied by Huawei from British networks in the month of July, which had resulted into major British telecom provider’s cost over-runs to the tune of £2 billion.

The CPS report and what it states?

The CPS report titled "Upwardly mobile" talks of the full range of benefits the country can get from the rolling out of the 5G network in the country. It especially lays stress on the recent sharp rise in the usage of internet services in the country which has helped a significant number of the company stay functional despite the lockdown, and millions of people deliver productively on the work-related commitments.

The rapid growth in e-commerce has also necessitated that the communication networks be updated and upgraded so that any increase in traffic can be handled smoothly and seamlessly. Early adoption of 5G network in the country is also essential to ensure that the UK does not lose its economic advantage over other competing nations. The technology upgrade is also important in view of the promises made by the Tory government to the people of the UK when it took office, and it will be extremely difficult to deliver in the absence of a 5G network.

The Huawei equipment controversy

Till July 2020 Huawei was one of the major suppliers of 5G communication equipment in the United Kingdom. In the wake of a crackdown by major countries on Huawei 5G equipment due to security loopholes that made them susceptible to espionage, the United Kingdom also decided to ban them in July this year. This came as a rude shock to many telecom services companies who had made large investments into 5G equipment with Huawei, which now requires a cost over-run running up-to £2 billion.

TalkTalk and BT fallout over delay in network sharing contract

TalkTalk, which has been in talks with BT Group’s company Openreach to sign a deal to be able to use its mega Fibre cable landline network, has not been happy with the progress in negotiations. The network which is being built by the British Government with GT being the implementing agency is purported to be shared by all telecom companies in the country. However, the cost that BT is charging to the other companies to operate over this network is not finding consonance, leading to many like TalkTalk to question BT's motive to staying true to the government mandate of fair completion in the usage of Openreach's fiber-optic network.

The stock price performance of BT Group Plc on the LSE over the past one year

BT Group Plc (LON: BT.A) is a UK based global communications provider. Previously the national telecommunication company of UK the company still holds the largest fixed-line connections in the country. The shares of the company trade on the LSE and are included in the premier FTSE 100 index.

(Source- Thomson Reuters)

The shares of BT Group Plc have not been performing well on the LSE since the starting of 2020, except for a sharp down-turn in months of March just as the country was moving into lockdown, the stocks have been in a downward spiral. The company’s shares were hovering at GBX 101.47 on 05 October 2020 at 11.58 AM GMT+1, adding 2.86 per cent on the previous day’s closing price.

The stock price performance of TalkTalk Telecom Group Plc on the LSE over the past one year

TalkTalk Telecom Group Plc is a British telecommunication services company that focuses more on the Business- To- Business segment of the telecom market providing, broadband, fiber, landline as well as mobile services to its customers. The shares of the company trade on the LSE and are one of the constituents of the mid-cap focused FTSE 250 index.

(Source- Thomson Reuters)

The shares of TalkTalk Telecom Group Plc (LON: TALK) have not been doing well on the LSE since the starting of 2020, and it had a sharp fall in March around the time of the lockdown before recovering and going into a slope again. The company’s shares were hovering at GBX 85.80 per share on 05 October 2020 at 12.14 AM GMT+1, adding 3.07 per cent on the previous day’s closing price.

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