In 2017 the government classed telecoms as ‘low priority’ for Brexit negotiations – news that the industry, its 180,000 workers, not to mention millions of UK customers, might have greeted with astonishment. With the exact nature of Brexit still up in the air, and massive uncertainty ahead even in those industries classed as ‘high priority’, the UK’s telcos are now having to prepare themselves as best they can. Here are some of the ways they have been – and will continue to be – affected by the UK’s exit from the European Union, including some of the knock-on effects for innovation and the customer experience.
- If the UK is to keep its status as a leading hub for technology and innovation there is much to do. EU citizens already living here will need to apply for ‘settled’ or ‘pre-settled’ status. New entrants will need to apply for working visas, and with targets for skilled workers, and ‘low-skilled’ workers likely to be prevented from working in the UK permanently, there is real concern that businesses will lose access to the talent they need. BT CEO Gavin Patterson told Bloomberg that hiring staff would be ‘more difficult’ after Brexit, but also said ‘ultimately, we are going to be hiring more of our own direct labour, and that’s what we’re getting on and doing today.”
- BT has made it known that the company is stockpiling ‘vast quantities’ of equipment in case of supply chain issues caused by disruption at the ports under a no deal Brexit. At the time of writing, other telcos have seemingly remained tight-lipped on the subject, but it would seem surprising if they weren’t making extensive plans in case of difficulties in getting goods and parts into the UK. Long-term problems could have a knock-on effect on research and development, the end result meaning that UK telco businesses are slower to innovate.
Regulations and frameworks
- Post-Brexit the UK will cease to be bound by the European Electronic Communications Code, the directive published in December 2018 aiming to modernise regulations and creating consistency across the member states, specifically encouraging investment in high-speed networks, harmonising rules for spectrum and 5G and bringing OTT services into the regulatory framework. However, the government has said it ‘would be minded to implement, where appropriate, its substantive provisions in UK law, on the basis that it would support the UK’s domestic policy objectives.’ Telecoms operators are likely to have mixed feelings about this, being uncertain that the strategy to promote 5G will work in practice. On the other hand, time’s running out for alternative strategies and the UK won’t want to risk falling behind its EU counterparts in terms of innovation and transformation.
- Theresa May has announced that the UK will be leaving the Digital Single market when it leaves the EU. For obvious reasons it’s now unlikely that the UK will benefit from funding to promote the strategy and in more general terms will not benefit from other measures to protect consumers and make it easier to provide digital services across Europe. May has however made clear that the government would seek a deal to share and protect data, though a ‘no deal’ would leave this on a cliff edge.
- Worries that leaving the EU would see net neutrality eroded in the UK look to be unfounded. In October 208 it was revealed that the EU Open Access Regulation has been updated for a post-Brexit UK to remove references to EU agencies, but the ‘overall policy position will remain the same’.
- Brexit could be bad news for smartphone-addicted UK holidaymakers. Before the EU slashed roaming charges in 2017 it was distressingly easy to run up huge bills in Europe just by checking email and posting on Facebook. Consumers might have hoped that the government would signal a willingness to protect them post-Brexit, but instead Parliament has drafted legislation to release UK operators from their commitments, on the grounds that they may incur additional costs from their European counterparts. No telcos have so far announced plans to reinstate roaming charges but it’s unsettling for customers. Perhaps the most positive way of looking at it from both industry and customer point of view is that those brands who don’t implement charges or devise generous allowances are likely to build loyalty and steal a bigger share of the market.
- If there’s a no deal Brexit, any UK travellers hoping to watch Netflix or play music through Spotify while they’re away in the Europe might be disappointed. The EU ‘portability regulation’ which allows customers to set up their account in one country and use it in another will cease to exist.
- One plus point for UK customers in remote areas is that If the UK was no longer under EU rules on state aid the government could provide additional support to improve telecoms infrastructure and network capabilities in a way that isn’t currently possible.
With the uncertainty caused by Brexit and gloomy economic forecasts coming from across the business community, it’s hard to be hugely optimistic about the next few years for telecoms – or any UK sector for that matter.
But to finish this post on an encouraging note, let’s end with the words of John Caudwell, co-founder of Phones 4U and known Brexit supporter. His vision for a post-Brexit EU relationship? "We just don’t want to be part of the club anymore but it doesn’t mean we can’t trade with each other perfectly amicably and perfectly properly without putting trade barriers in place. We want a free trading society, we want to be free from that bureaucracy, we want to be friends with Europe, we want to be part of Europe, they are our neighbours." Fingers crossed…