Disputes threaten UK's broadband progress

O2 chief warns that Britain risks falling behind rivals
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The Independent Online

The chief executive of O2 UK has warned that Britain could fall behind in moving into the digital age if the industry and the regulators do not urgently settle their differences.

In his first interview since taking over the role last year, Ronan Dunne told The Independent: “Everybody agrees UK plc needs to extract a digital dividend. We want the UK to be a leader and UK plc to benefit. We don’t want it to fall behind.”

Telecoms companies remain locked in talks with each other, the regulator and the Government over the future of information and communications technology in the UK, such as the roll-out of broadband.

Mr Dunne, who joined O2 from BT before it demerged in 2001 and was formerly the UK division’s finance director, said: “Things like government and regulatory certainty are really important. If we sit on our hands and don’t invest, there is a danger that Europe gets behind the investment curve.”

He admitted that finding a common ground has been tough, but a solution can be found. “There is a demand for moving towards 100 per cent broadband, so working towards that has got to makes sense.”

The telecoms sector has been in focus this year as Lord Carter, the Communications minister, released his report Digital Britain, with plans to bring broadband to the entire country by 2012.

O2 and Vodafone could have to give up some valuable bandwidth to other operators, as the companies remain in dispute over opening up the spectrum. The regulator, Ofcom, will step in if the industry cannot come up with a solution by April. This forms part of government plans to bring broadband through a mix of fixed line, wireless and mobile internet coverage.

Broadband has become an increasingly important issue for the mobile phone industry. “As an industry, we have just gone through four billion mobile devices. There are more people who have access to the internet via a mobile device than fixed,” said Mr Dunne. This has increased as internet over mobile phones has become more sophisticated on smartphones such as the iPhone.

Mr Dunne said that deployment of next-generation information and communications technology could create two million jobs across Europe and generate $950bn. The mobile industry remains relatively strong despite the financial crisis, and the message at last week’s Mobile World Congress in Barcelona was clear. The mobile industry can use the downturn to move forward and possibly help to kick-start the recovery. Mr Dunne said: “Most people recognise that the sector is not immune but is more resilient than most. People are going to keep using mobile phones; we have to ask how we give them more value. We can make a huge impact right across the economy.”

The question now is, where next? Mr Dunne said: “We recognised that mobiles were commoditised three years ago,” adding: “We are only scratching the surface of the opportunity of what we can do.”

One theme of this year has been the development of applications for smartphones. Last week, Nokia launched its Ovi store, and Microsoft unveiled its Marketplace for the latest Microsoft Mobile, while O2 is committed to helping applications developers through its own platform.