Ofcom on Thursday launched an in-depth strategic review into the U.K.’s telco market in a bid to ensure continued innovation, investment and competition in the sector.
It is the watchdog’s first major assessment in 10 years, and aims to create a predictable regulatory environment that will incentivise private-sector spending, remove obstacles that may hold the sector back, and identify whether there is scope to deregulate in some areas. The review will cover the fixed, mobile and broadband markets.
"We have seen huge changes in the phone and broadband markets since our last major review a decade ago. Only five years ago, hardly any of us had used a tablet computer, high-definition streaming or 4G mobile broadband," said Steve Unger, acting CEO of Ofcom, in a statement.
Ofcom began its last strategic review in 2003 and published its conclusions in 2005. One of the biggest changes it ushered in was allowing alternative operators to access incumbent BT’s infrastructure on equal terms.
The first phase of its new review will reach out to industry players, consumer groups, and central and local government to evaluate the current and upcoming trends that will have a bearing on digital communications.
"Our new review will mean Ofcom’s rules continue to meet the needs of consumers and businesses by supporting competition and investment for years to come," said Unger.
One industry observer took Thursday’s announcement as an opportunity to urge Ofcom to ignore calls to impose heavy-handed new regulations on BT’s infrastructure arm Openreach and its fibre network.
"The way some commentators have referred to policy reminds me of a hypochondriac trying to diagnose the illness. The risk of needless surgery not only adds a layer of cost, it could kill the patient," said Barry Zeitoune, telecoms equity analyst at Berenberg, in an open letter to incoming Ofcom CEO Sharon White.
He called on the regulator not to mandate fibre-to-the-home (FTTH) but adopt a demand-led approach to network deployment instead. He also advised Ofcom not to force BT to spin off Openreach, warning that its ability to invest would diminish if BT could no longer account for its consumer and infrastructure operations as one entity.
"If Ofcom wants what is best for the U.K., it should be providing regulatory clarity to BT to make the investment that is in the country’s interests," Zeitoune said.
