4G benefits will not be as speedy as the technology

London:

Superfast broadband is unlikely to deliver the rapid returns for the UK economy that have been predicted, according to a leading business consultancy before Britain’s first 4G network launch Tuesday.

The Economist Intelligence Unit said that expectations of big early returns from superfast fibre and mobile broadband may be overstated, even if there is greater confidence of a beneficial longer-term impact.

The warning that there needs to be a “dose of reality” about short-term benefits will come as mobile users in the UK have their first opportunity to use long-delayed superfast mobile broadband on a 4G network. The network, which will initially be available in 10 cities, will allow download speeds several times faster than 3G.

Superfast mobile and fibre broadband is an essential part of government policy given the belief that rapid Internet access will boost productivity, create new industries and link distant areas. Telecoms groups are already seeing a rapid adoption of faster broadband services to allow data-heavy applications and content over the Internet, such as TV and films.

However, the EIU argues that existing networks are capable of delivering many of the anticipated new services over the next few years. It also warned that there were obstacles to even using the existing technology capabilities, including a shortage of digital skills and ingrained resistance to change, although it predicts that there will be some short-term stimulus to jobs and economic activity.

The report says that some projections regarding the effect on the British economy and jobs over the next five years appear fanciful. “The rollout of superfast broadband, both the mobile and fixed variants, will help, but it would be unwise to expect early returns,” it says.

The EIU says that expectations “run high that the rollout of superfast broadband will help to kick-start economic growth, bolster productivity and create jobs”, as well as foster a transformation of education, healthcare and other services.

“A dose of reality is in order, however, about the scale of the impact in the shorter term,” said Denis McCauley, director of global technology research at the EIU. “For many anticipated benefits, it is less about building bigger pipes and more about the need for established systems, processes and skills to evolve.”

Almost £1 billion in state funds has been allocated to help accelerate superfast network development, which aims to boost national broadband speeds to more than 24 megabits per second - nearly three times today’s average — by 2015. Telecoms providers have committed to a multibillion pound upgrade of the nation’s fixed and mobile broadband networks.

The EIU says that it was difficult to see how the shift to superfast broadband would match that resulting from the earlier switch from dial-up to broadband internet in the near term.

Early impetus to job creation may also not be sustained, it said, following a short-term direct boost to jobs on the back of the engineering work to build networks. Meanwhile, the practical implication of services using superfast networks would take time and involve wider reforms of systems such as healthcare and education.

— The Financial Times