There is talk that Ofcom is looking to introduce price caps in relation to the amount which telephone companies charge each other to connect to each other’s networks. While on the surface this would not seem to impact upon mobile broadband, at least in the short to medium term, there is concern that any price caps would reduce investment in the mobile broadband arena. So what exactly is going on?
Ofcom is looking to introduce price caps which could cost the industry around £1 billion a year and reduce the amount of money available for investment into other areas of the mobile telecoms arena. As one of the major investment areas of late has been mobile broadband it is likely that we could see a reduction in investment in this area, although this could also be used as a bargaining tool by the telecom companies.
This comes at a time when the UK government is very anxious to roll out superfast fibre-optic broadband in the UK and also encourage the take-up of mobile broadband. There is no doubt that broadband is a vital part of the future make-up of the UK economy, receiving significant mention in the last budget, and the UK government and the telecoms regulator will be keen to encourage investment in the short, medium and longer term. So will we see some kind of compromise agreement?