The upgrade of the UK’s voice phone network could lead to significant benefits for consumers and the wider economy as highlighted by research by Frontier Economics on behalf of BT Group.
The UK is in the middle of a once in a lifetime upgrade of the networks and technology that deliver our voice and broadband services. This means replacing old analogue networks rolled out in the 20th century, primarily to deliver voice products, with future-proof, digital, networks capable of supporting the connectivity needs of UK consumers, businesses and the broader economy. As part of this upgrade, UK telecoms network operators will retire the equipment currently used to provide telephone calls and replace it with modern digital “All-IP” technology.
There is a pressing need to rapidly migrate customers off the analogue voice technology and onto digital, due to the age of the underlying equipment. The current equipment in local telephone exchanges was installed in the 1980s and 1990s and parts of it are now almost 40 years old. A combination of increasing fault rates and an aging workforce means that there is an increasing risk of widespread failure.
Frontier’s report, commissioned by BT Group finds that a prolonged delay of the industry wide migration to the new voice technology could lead to costs borne by users of communications networks, and to the UK more widely. The benefits of migration include the following.
- It will support the UK in achieving benefits associated with investments in the ongoing programme to upgrade the UK’s communications infrastructure to full fibre. Early migration (compared to a switch off date of 2030) could support productivity and workforce participation benefits associated with full fibre reaching up to £2bn for the UK economy.
- It will allow customers to realise the benefits of All-IP networks as quickly as possible. Just a two-year delay beyond 2025 would equate to direct costs to users of up to £1.7bn cumulatively in financial losses and costs associated with fraud.
- It will ensure a more reliable landline service. The PSTN fault rate is increasing and a two-year delay to 2027 would create a welfare cost to UK consumers of £22m.
- It will avoid environmental costs as All-IP networks are much more energy efficient and hence will help the UK meet its net zero objectives by reducing demand for electricity.
Frontier’s report set out a number of recommendations that could support the successful migration to the new technology:
- Government and Ofcom to use their considerable communications capacities to help build understanding and trust with the wider public.
- A staged regional switch off could help the migration.
- Telecare services providers should be able to efficiently access CP testing facilities.
- Migrating customers with more complex requirements should be carefully planned.
Please click here to read the full report.
Frontier regularly works with public and private sector clients on issues related to telecommunications policy. For more information, please contact email@example.com or call +44 (0) 20 7031 7000.