Chris Williams, telecommunications partner at Deloitte, comments: “We welcome the news that Ofcom is looking at ways to encourage the telecoms industry to invest in the UK's broadband infrastructure - the future of very high speed broadband in the UK depends on the outcome. The telecommunications industry is looking for assurances that they will be able to make a return on any investment into next generation broadband services. Any investment will need to consider what cost, if any, can be passed on to the consumer or to an intermediary, such as an advertiser.  
 
“Key to the debate on investment in broadband infrastructure is costing the benefit of speed and ensuring it coincides with commercial logic. Will an upgrade unleash an equivalent wave of value?

"A consideration in Ofcom's proposals is how future broadband delivery can be economic in all areas. Cost may be very high in some areas which may result in them never getting super fast broadband. To address this issue public sector involvement may be required.

“Another consideration in the proposals relate to wholesale prices. For operators these services are the key to ensuring competition and fair returns for the investor.  Ofcom proposes a pricing approach that uses existing prices for existing services and allowance for risk for new services.  This is critical as it seems to allow new super-fast services to have new prices and equivalence ensures that competitors obtain similar prices and services.  The degrees of freedom allowed to set these prices will significantly determine the investment, as will the potential for further regulatory controls on them.  The Ofcom approach is clearly different from the EC recommendations.  Ofcom includes the option for the network builder to set prices for new services  to match demand and risk.”

Ends

About Deloitte
In this press release references to Deloitte are references to Deloitte & Touche LLP, which is among the country's leading professional services firms.
Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein, whose member firms are legally separate and independent entities.  Please see www.deloitte.co.uk\about for a detailed description of the legal structure of DTT and its member firms.
The information contained in this press release is correct at the time of going to press.