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Tuesday, 4 October 2011

UK 4G fast mobile data at least 2 years behind major countries, will cost UK businesses £732m/year

Open Digital's first paper (pdf) out today looks at the impact of late roll-out of 4G fast mobile data for UK businesses.

In fact it's an issue that affects consumers and businesses alike, but social benefit is hard to quantify whereas the number of business hours lost through slow or completely absent mobile data is relatively easy to estimate and put a price on: 37 million business hours, costing £732m per year.

We acknowledge that early adoption is not always essential to reaping the benefits, but in the case of 4G in the UK we are so far behind other leading countries that UK businesses and consumers will miss out on the benefits.

In addition to the lost time through slow mobile data, UK businesses won’t be able to fully benefit from new cloud-based business tools until the UK has a nationwide reliable high speed mobile data network

Ofcom doesn't expect the first commercial UK 4G services until 2013, and roll-out is not expected to complete until 2017.  This is 4 years behind the world's first 4G services in Oslo and Stockholm and the same year South Korea plans to complete its roll-out, which started this summer.

Germany and the US are also in the leading pack, with 4G deployment well under way in 2011.

UK deployment over a 4 year period between 2013 and 2017 is too slow and starts too late to keep the UK competitive.  Studies show 4G will offer average download speed over 3 times those seen on today's 3G network, plus it brings much needed capacity as mobile data volumes have increased by 67% year-on-year.

4G can also support larger cell sizes without the performance penalty seen with 3G, meaning many rural "fringe" areas currently stuck on 2G will get mobile broadband for the first time.

Our calculation of the lost hours is based on data available across a number of reports from Ofcom.  It uses as a starting point Ofcom's assertion that the average 3G daytime mobile download speed is 2Mbps.

One thing we didn't factor in is how the quality of 3G broadband is likely to be impacted as mobile data use continues to grow.  More capacity will be needed as data use grows, and mobile operators will be reluctant to invest with 4G technology on the horizon, meaning our estimate is likely to be an under-estimate.

Yet Ofcom is yet to hold the auction to allocate necessary spectrum, and news that the auction has been delayed for 3-6 months itself has a price tag of £183m - £366m.

Whilst mobile data use has rocketed, revenues per megabyte carried have fallen, meaning data is not seen as profitable for the incumbent mobile network operators clinging on to lucrative voice and multimedia messaging services.

4G is a data-centric technology. Everything - voice, text messages, etc - is carried as data.  With life set to get tough for the big four network operators when data is the only commodity they have to sell, it's no wonder they're not chomping at the bit to see the government push 4G fast mobile data out quicker.


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