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Digital - Infrastructure for our 'Connected Future'

Global infrastructure report

Jan 2019

With digital innovation now firmly at the forefront of our everyday life, interest in the supporting infrastructure has come sharply into focus. Although we have spent much of the recent past seeking ever-increasing capacity from existing infrastructure, it is clear that the latest and most hotly-cited innovations will most likely see us cycle back to connectivity as the key enabler of infrastructure development.

There is no debate that fibre reigns supreme when it comes to throughput. The team at euNetworks puts this as well as anyone – “fibre is and will remain the only scalable economic solution providing the crucial underlying foundation to an increasingly connected and bandwidth hungry world”. This is equally important regardless of the platform considered, be it fibre-to-the-premises (FTTP), 5G or fixed wireless – with each equally reliant on a well-connected and diverse fibre infrastructure.

Re-orientating the approach to infrastructure growth is a challenge. After years of technologically driven incremental expansions of bandwidth, it seems it is extremely difficult to secure the focused investment needed to scale up connectivity to meet the needs of modern digital innovation. A step-change is needed, but underpinned by an aligned regulatory framework, strategy and approach. It is far from clear though whether these three foundations are in place. Brief consideration of other infrastructure-intensive markets, and the experience of many other European countries, might lead to the view that a utility-style approach provides an answer. It certainly would help address some of the shortfalls left from the prevailing, at least in the UK, competition-based approach to infrastructure development.

Bigger picture, moving from a vertical integration structure of the industry to a utility-based and open access model would allow regulatory focus to move up the ladder and competitive forces to move down, facilitating innovation at the retail level. With careful planning and forethought, the consistent and long-term rate of return of the regulated utility style owner / operator becomes increasingly attractive to investors, driving investment into the model. Can we otherwise meet our connectivity aspirations over the next 20 years?

This report is one of four supplements, expanding on the findings of our 2018 Connected Future report and our 2017 CMS Infrastructure Index. The 2019 Infrastructure Index will be available at the end of 2019.

Publication
Digital - Infrastructure for our Connected Future
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Authors

Picture of Chris Watson
Chris Watson
Partner
London