Summary

Since 2020, the telecommunication industry has witnessed significant growth, intensifying due to the pandemic-induced demands for connectivity and remote work solutions. The sector's essential nature was underscored by a 24% increase in average mobile data consumption per month in the UK, hitting 5.6 GB, and a 6% rise in fixed broadband consumption to 453 GB per month in 2021. Globally, the telecommunication market was valued at $1.73 trillion in 2021 and is on an upward trend with a CAGR of 4.85% until 2030, mainly fueled by electronic device usage and the rise of 5G technology. In fact, 5G mobile subscriptions are expected to reach 4.8 billion by 2026. The UK market, the fifth-largest in network infrastructure revenues, grew by 10.2% in 2021 reaching $91.52 billion. Export values in telecom products grew by 14% in 2022 to nearly $5 billion, while imports surged, leading to a persistent trade deficit. 5G infrastructure investment in the UK is aggressive, with a projected spend increase of 303.4% by 2025. Despite these advancements, challenges such as high CAPEX requirements and returns over long timescales remain prevalent in the competitive landscape of the telecom network industry..Emerging Trends in UK's Telecommunications Market The UK's telecommunications market has been showing significant developments in recent years, being the fifth-largest globally concerning network infrastructure revenues. With a steadily growing annual growth rate predicted at around 3.62% from 2023 to 2027, the sector stands as a pivotal force in the country's economy, propelling towards revenues that may hit close to USD 100 billion in the upcoming years. One of the major emerging trends in the UK's market is the shift towards next-generation network technologies, namely Fiber to the Premises (FTTP) or full fibre, and 5G networks. There has been a considerable push by the UK Government to connect approximately between 10 and 20 million premises to full-fibre by 2025 and intends to achieve complete nationwide coverage by 2033. This advancement is also reflected in mobile technology, with the UK ranking impressively within the top ten globally for cities covered by 5G networks—accounting for close to 60 cities by 2022. The push for improved telecommunications infrastructure is not arbitrary. A substantial factor driving demand is the nation's growing populace that necessitates an enhanced need for mobile and internet connectivity. Moreover, technological innovation, notably the widespread adoption of mobile devices, has catalyzed the surge in demand. It is estimated that the number of mobile phone service subscriptions surpasses the actual population density, indicating multiple subscriptions per individual in the UK. This exponential rise in mobile usage is also underscored by data that showcases the declining trend in landline calls while mobile communication skyrockets—evidenced by mobile calls made outside the regular network rising to a staggering between 80 and 85 billion minutes. The changing work dynamics, particularly the inclination towards remote working spurred by the COVID-19 pandemic, has only amplified this trend. This scenario is exemplified by the substantial increase in data consumption on both mobile and fixed broadband connections, with average monthly data usage on mobile and fixed broadband climbing to around 5.6 GB and 453 GB respectively in 2021. However, the increase in connectivity demand also underscores a critical challenge—the perpetual trade deficit the UK faces in telecommunications products. For several years, the value of imports, predominantly from leading markets such as China and other Asian countries, has consistently outstripped exports, positioning the UK in a trade deficit situation. In 2022 alone, the UK's imports soared close to USD 22 billion, whereas exports tallied up to about USD 5 billion. In conclusion,.Title: Key Players Shaping the Telecommunication Networks Landscape in the UK The UK's telecommunication market is a vibrant and competitive field with numerous players contributing to its growth and development. Among these, several stand out due to their significant impact, innovations, and market presence. **Vodafone Group**: As one of the world's leading telecommunications companies, Vodafone is a household name in the UK market. With a strong focus on mobile services, they have been at the forefront of rolling out 5G technology and investing in network infrastructure to enhance connectivity for their customers. **BT (British Telecom)**: BT's legacy has deeply influenced the UK's telecommunications landscape. With an extensive network that includes a large number of telephone exchanges and plans to convert copper links to fiber-optic broadband, BT continues to be a major player in providing foundational network infrastructure. **AT&T and Verizon**: These American telecommunications giants, while not UK-based, have a global impact, including on the UK market. Their advancements in technology and expansive service offerings indirectly influence market trends and competitive strategies among UK service providers. **Deutsche Telekom**: The German telecommunications company has a significant presence in Europe and affects the UK market through its various operations and strategic partnerships. Their focus on innovation and strong brand value contributes to the European telecommunication ecosystem. **China Mobile**: As one of the world's largest telecom service providers, China Mobile's operations, though primarily centered in China, set global standards for network infrastructure and mobile services, affecting market expectations and technological advancements worldwide. These key players in the telecommunications market are not just standalone entities but are part of a larger global network that influences consumer expectations, drives technological innovation, and shapes the future of communication in the UK and beyond. The contributions of these companies have been essential in providing advanced communication services, extending network infrastructure, and paving the way for new technologies that usher in the era of hyper-connectivity and digital transformation.

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Summary and extracts

1 Market summary

1.1 Presentation and definition of the installation of telecommunication networks in the UK

The telecommunications industry is part of information and communication technology. Its purpose is to make communication around the globe possible using different means of transmission, such as electrical signals over metallic wires, radio waves through the air and space, light signals through optical fibers. These are used in communication services such as landline and mobile telephony, internet, cable and satellite television and many others. In general, these types of transmission differ according to the frequency of the signal produced and consequently to the distance.

The telecom industry has been critical to global growth, especially during the outbreak of the pandemic. Thanks to the progress of IT information technologies it has been possible to support remote work, to see people online who otherwise, due to the limitations imposed for the covid, would not have seen each other.

The telecommunication are used in the transmission systems that involve three elements: transmitter, transmission medium and receiver. In turn, the transmission systems, created with the technologies of fiber optic cables, copper wires, cellular, WI-FI, satellite, are used in the various telecommunications networks. The latter indicates the network of devices and equipment for the transmission of information and communication between users over long distance.

The telecommunications market can be divided into two large business areas: on the one hand, telecommunications services, offered by operators and which include various communication infrastructures and information transmitting technologies (like mobile devices, television, fiber optics and internet); on the other, telecommunications equipment, which includes the production and sale of, for example, mobile phones, routers, switches, antennas, cables, modems and other communication devices purchased mainly by end consumers.

For the operation of a telecommunication network, it is therefore essential:

  • The necessary equipment such as telephone components, cell phones, network switches and modems for building and operating the telecommunications infrastructure. They are made by telecom equipment providers.
  • The installation, management and maintenance of telecommunications infrastructures, such as fixed and mobile telephone networks, high-speed Internet networks and television broadcasting networks offered by network operators. The latter, also called telecom operators, invest a lot of money for the construction, through the equipment, and maintenance of the infrastructures to which the service operators will then have access.
  • Access to communication services, such as the internet, landline and mobile telephony, cable television and more. Service providers, also called telecom service providers, pay network operators to gain access to networks, which in turn is sold to end consumers.

Current state of the British telecommunication networks market

According to the Ofcom, the UK telecommunication industry should growth at an annual growth rate CAGR of 3,62% over the forecast period 2023-2027. Moreover, the United Kingdom is the fifth-largest country in terms of network infrastructure revenues.In the meantime, the next generation Fiber to the Premises (FTTP), or full fibre, and 5G networks are rapidly developing. For the latter technology, the United Kingdom ranks ninth in the world for cities covered, equal to 57 in 2022.

Moreover, the UK Government has implemented clear objectives related to the availability of full-fibre and 5G networks in the country.  15 million premises will be connected to full-fibre by 2025 and the whole country by 2033.

1.2 the telecommunications services and network infrastructure sectors in the world

In recent years, especially with the spread of the pandemic, the telecom industry has become essential for global growth. Every individual, economic sector and governments have started to make more use of communication means to send data, signals and messages.

Telecommunications services

In the past, the costs for installing and maintaining ...

1.3 The UK market, the fifth-largest country in terms of network infrastructure revenues worldwide

In the United Kingdom, there are roughly ** million inhabitants that are connected by the telecommunications industry. Over the past years, the telecommunication industry in UK has recorded a decrease in revenue up to ****, instead, in **** it recorded a growth of **.*% reaching USD **.** billion. The declines in revenue are partly due to ...

1.4 The trade balance in deficit

The following graph shows the development of imports and exports of:

Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data (***)

The graph below shows that from **** to ****, the value of imports was always higher than ...

1.5 Consequences of the COVID-19 pandemic

With the COVID-** pandemic, a large portion of the population had to work from home. This phenomenon, together with the increase in video calls, led to a considerable increase in the use of data services consumption. As a result, there was increased pressure on service providers to provide better quality of ...

2 Demand analysis

2.1 Demand characteristics and drivers

It is now clear that the demand for telecommunications networks is constantly growing. This increase is due to a variety of reasons, including:

UK population growth

The growing population in the UK is increasing the demand for mobile and other devices with which information is transmitted via an internet connection. In ...

2.2 Coverage and premises of telecommunications networks

The demand for coverage of different telecommunication networks varies in different parts of the country. In general, urban areas need better coverage than rural areas such as Scotland, Wales and the North East. The reason is that urban areas have a higher concentration of inhabitants, economic activities and government offices that ...

2.3 Wireless technology innovation: 5G networks

For many people, it has become essential to connect to the Internet and to have a fast and secure connection. Towards these goals, manufacturers seek to develop increasingly innovative technologies and service providers seek to deploy these technologies in their networks. This push for innovation stems from the high user demand ...

3 Market structure

3.1 Structure of the telecommunications network industry

Telecommunication is an asset-intensive and competitive market. The reason is that network infrastructure includes all the hardware resources of service providers, but also enterprise networks. Thus, routers, switches, broadband access, optical transport, enterprise telephony, storage area networks, infrastructure firewalls and many others. In the case of service providers' networks, they provide ...

3.2 Installation process

Before ****, the telecommunications industry was run by the government. As in a monopoly, the General Post Office GPO was the organisation that serviced the country. Today, the telecommunications industry is a more competitive market than for example ** years ago when there was only BT providing landlines in the UK. There are ...

3.3 Supply chain and distribution channels

Source: ****

Telecommunication operators can therefore obtain revenues by selling their services in different markets. Below, one can see the revenues in the UK of both wholesale and retail telecom operators. In both distribution channels, there has been a decline in sales compared to ****. In fact, in ****, there was a drop of ...

3.4 Main Players

In the UK, telecommunication networks are installed by several telecommunication companies and operators, both national and international. Among those operating in the UK, the most important are BT Group, Sky, Virgin Media, TalkTalk, Vodafon and EE [***]. Each specialises in something. For example, BT provides fixed-line and mobile services, as does EE ...

4 Analysis of the offer

4.1 Typology of the offer

There are different types of telecommunications networks, of which the most important are:

4.2 Costs of network installation and management

It is complicated to quantify expenditure on telecommunications infrastructures, given their complexity in terms of equipment and the amount of other elements required for their implementation. The graph below provides a global overview of how much telecommunications companies have spent of their capital on telecommunications infrastructure, IT infrastructures (***) and hyperscale infrastructure. ...

5 Rules and regulations

5.1 Regulatory framework

The Communications Act ****

This act, which replaces the previous Telecommunications Act ****, is important because it establishes Ofcom as the regulator for the broader communications industry. Prior to this act, there was a licensing regime for telecommunications. Today, however, general licences are granted to telecommunication service providers, who must comply with the ...

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Companies quoted in this study

This study contains a complete overview of the companies in the market, with the latest figures and news for each company. :

Vodafone
O2
Sky
TalkTalk
BT

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The Telecommunication Network Installation market | England

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