In September 2021, Total Telecom pulled off one of the largest in-person events since COVID-19 with over 2,000 delegates attending Connected Britain in London. I had the privilege of chairing a discussion panel on “Delivering a Smart Britain: from cities to rural communities”. This brief article summaries my reflections and thoughts following that discussion.
On the panel were:
Ben Roome, CEO, Digital Mobile Spectrum
Jessica Ellis, Head of Programme, 5G Testbeds, DCMS
Rob Gilbert, Country Manager- UK, HFCL
Raj Mack, Head of Digital Birmingham
Andy Nash, Commercial Development Director, CityFibre
City Conundrum
Most of us would quite happily assume that large cities are overwhelmed with attractive offers of investment in digital infrastructure.
According to Raj Mack of Birmingham City Council, this isn’t always the case, and, in some cases, large cities can struggle to attract the level of private investment needed to ‘level up’. For example, at the time of writing this article CityFibre has no publicly announced plans to invest in Birmingham despite being the second largest UK City.
Some of the most fibre enabled places in the UK are smaller cities and towns such as Kingston upon Hull, Milton Keynes and Belfast which top the fibre coverage charts according to broadband data company ThinkBroadband.
There are several reasons for this unusual phenomenon.
First, large city authorities can be more complex to navigate in terms of identifying the right contact, accessing public assets and finding your way around complex internal planning and legal processes. When combined, these factors can drive up the cost of doing business reducing the commercial attractiveness of large cities.
Another factor is the sheer scale of investment required to provide full fibre coverage in large cities. The high level of investment required in large cities can increase exposure to financial risk thus reducing the attractiveness for investors.
Building digital infrastructure in large cities can also swallow up a lot of the resources required to design, build and manage telecoms networks. Smaller, compact geographical areas can be less overwhelming on company resources.
To get around this, senior leaders and economic development teams of large cities and regions should create innovative commercial and market incentives to unlock investment in digital infrastructure.
Smart Places
While cities seem to be leading the Smart City ‘revolution’, many suburban and rural areas also stand to benefit from doing things smarter. As such the narrative needs to shift from Smart Cities to Smart Places.
Agri-tech is a case in point where farmers can use sensors to monitor soil temperatures, maintain employee safety and monitor equipment, therefore saving time and resources.
And you don’t need fibre networks in rural areas as many of these use cases can work over existing cellular (4G) or low cost LoRaWAN networks for example.
Other rural use cases such as telehealth, remote learning, and tourism may require networks with higher a speed and capacity, however.
In places where fibre connectivity is unavailable or where LoRaWAN or other technologies are not a viable option the Shared Rural Network (SRN) plays a key role and has promised a major boost in mobile connectivity by 2025 according to a roadmap to support 4G enabled Agri-tech use cases according to Ben Roome of Digital Mobile Spectrum.
Build, Fill and Thrill
Build, fill and thrill is how Andy Nash explains CityFibre’s current and long-term plan. It suggests that the fibre operator may not just stop at building fibre networks but may also involve itself in activities to stimulate traffic and content as well as driving up the number of ISPs that use its network.
This approach to stimulating interest is not unique and has precedent. Google invests in fibre networks and by unlocking downstream connectivity they stimulate demand for its services generating advertising income.
It remains to be seen what fibre operators will do to stimulate and drive traffic. We will be watching with interest.
Building Bankable Smart Places
There has been a plethora of alternative fibre network operators entering the UK market backed by billions of pounds of investor cash, however the same can’t yet be said of investment in Smart Places.
Jessica Ellis of DCMS agreed that making Smart Places bankable is a challenge that needs to be overcome.
Investors view Smart Places as being risky as the returns are not obvious. In addition, most of benefits are realised by local authorities and demonstrating a return through public value e.g., increased productivity, cost avoidance and service improvement is very complex, thus proving bankability can be a stumbling block for investors.
All this points to the fact that Smart Places requires an innovative approach to unlick investment.
Special purpose vehicles (SPVs) and innovative financing models have been used in other parts of the world as a means for public bodies and service providers to share investment risk with reward.
When creating SPVs, local authorities need to bear in mind that it is critical to ensure a steady revenue stream is made available to make the SPV self-sustainable enabling it to evolve its own credit worthiness and to raise additional resources from the market.
Local authorities also need to ensure that any public contribution is used to create infrastructure that has public benefit outcomes.
Intelligens Consulting's team of technology, strategy, economic, procurement and finance experts can help design and deliver Smart Place strategies. We have developed a strategic framework, research and benchmarking methodology and a unique coding schema to support the development of smart place strategies and roadmaps.
Please contact us should you wish to learn more about anything discussed in this article.