Urban Transformational Digital InfrastructureRaj Mack – Head of Digital BirminghamBirmingham City CouncilEmail : firstname.lastname@example.org
Do Urban areas require a transformational Digital InfrastructureEuropean PerspectiveThe European digital Internet economy is already bigger than Belgium’s nationaleconomy and growing faster than the Chinese economy. Already worth hundreds ofbillions of euros, in a few years it could reach over 5% of EU GDP. In some MemberStates it’s already higher. And by 2016, online spending could account for over oneretail euro in ten. (Neelie Kroes)National Perspective• Where broadband goes, growth follows • creates five jobs for every two it displaces. • helps small companies double growth and exports (80% of businesses in Birmingham are SMEs) • increasing broadband penetration by 10% translates as 1-1.5% on GDP • doubling broadband speeds results in 0.3% increase in GDPCore Cities • Cities are seen as the economic drivers for their hinterlands • generate 27% of the UK economy • New freedoms and Enterprise Zones equate to 1million jobs and £44billion of GVA, but excellent connectivity is key
Is there a need for intervention ?Rural versus Urban• Rural connectivity for all is essential – its the fourth utility but …• Faster upload and near symmetrical services are key to new business opportunities• Transformational ultrafast speeds are key to inward investment, regeneration and economic growth• it would unlock agile working,• prices need to be affordable in order to drive take up and deliver innovative new solutions by businessesThe Urban ChallengeBirmingham • 85% Virgin Media Coverage, • 25 of 28 Exchanges will be upgraded over the next few years according to a BT source So where’s the problem ?
The IssuesThe Current Incumbents• Virgin Media – asymmetrical services, closed network, no public announced plans for increasing footprint – focus inresidential market• BT – upgraded exchanges do not mean ubiquitous coverage, not an wholesale open access network, asymmetrical,cherry picking which cabinets to upgradeBoth incumbents seem satisfied to take an incremental approach to digital infrastructure –content to sweat existing assetsThe regulatory Process - OFCOM• Regulates 2 markets. -Broadband market – Asymmetrical Services – predominantly focused on residential services -Business market – ethernet and leased lines – connection fee and revenue costs mean that largely unaffordable for the majority of SMEs Is there a need for a third market – the middle ground ?
A recognition of the importance of transformational digital infrastructure for urban areasSuperConnected Cities Programme offered;• step change in broadband infrastructure and services,• opportunity to support the growth of the creative and digital industries and the knowledge economy• to underpin the move towards smarter city systems .
Birmingham’s offering to our business community - delivered in partnership with the private sectorWe aimed to deliver :• A step change in digital infrastructure capable of delivering true, world-class connectivity.• Ultrafast services offering a minimum download speeds of 100Mbps services rising to 1Gbps and greater• Symmetrical services to service demand in digital intensive industries and high priority growth areas• Cost effective services i.e. connection and subscription charges must be within the cost of ownership parameters forSMEs.• New infrastructure should be open access at the passive level to drive innovation, encourage introduction ofcompetition and facilitate shared usage by telecommunications operators and service providers. Both BT and Virgin Media has challenged the EU Commission on the State Aid ruling – citing that the proposals would impact their business models
So why isn’t the UK leading the way?• Every large City will tell you the same thing SMEs can’t affordpremium services and there is currently no adequate provision for microand SME businesses• Other countries are leaving UK behind – (tomorrow at FTTH Councilwe’ll hear to what extent that is )• The incumbents cherry picking is resulting in ‘Islands’ of poor andfragmented connectivity and is acting as a real dis-incentive for newoperators interested in towns and cities• There is still confusion as to what service availability means - Is itacceptable that having the ability to deliver services and choosing not tomean that an area is adequately served• How do we convince the incumbents that we need to invest NOW toaccelerate new innovations and services and not just follow today’sdemand.
The Opportunity for the UK to lead is still there if……National Regulator• Takes up the challenge and recognises the gap in the market for affordable broadband services for SMEsIncumbents• Put UK Plc before the needs of short term profits and investors• Embrace competition from new operators and accelerate the development of new product setsUK Government• Re- enforces its ambitions to have the best broadband in Europe by 2015• Recognises that Cities need the transformational digital infrastructure to drive and deliver the economic growth and jobs
Thank you & Any Questions ?Raj MackHead of Digital BirminghamEmail: email@example.comMob: 07823534981