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Coronavirus Brings Home Importance of Investment in Digital Infrastructure

31.03.2020

The coronavirus pandemic has thrown into sharp relief the need for a good digital infrastructure, not least because of the sudden huge increase in the number of people working from home.

There have been reports of networks coming under pressure as mobile and home internet use has skyrocketed.

The current crisis may last weeks or, more likely, months. But we can’t assume that, when it’s all over, things will go back to the way they were before. The chances are that many businesses and individuals will reflect on the experience and decide that working from home suits them.

The economic outlook too is highly uncertain, with experts predicting a severe recession and no way of knowing how long the effects will last. The immediate priority of Cardiff Capital Region is how best to help businesses struggling with the short-term shocks. But in the long term, the connectivity in our region will make a huge difference to the resilience of our communities and businesses as we move into recovery.

That’s why the decision we made to further invest in our digital infrastructure will be even more important than we originally thought. Fortunately, in Cardiff Capital Region we already recognised the key role the best possible digital infrastructure would have in ensuring our competitiveness and resilience in the future.

Cardiff Capital Region’s Regional Cabinet recently pledged to help fund the advance of the digital infrastructure of the future within South Wales. In doing so, the Cabinet demonstrated its awareness of the critical role access to the latest digital technology will make to the businesses of tomorrow.

Evidence shows that there has been under-investment by commercial firms in digital infrastructure in the CCR. Yet research also shows that access to full fibre broadband and 5G technology could make a huge difference to our businesses – particularly to small and medium sized enterprises (SMEs), which make up 96% of our businesses.

It’s the aim of the CCR to transform the lives of its citizens by making the region more competitive, connected, and economically resilient, boosting living standards and employability. To do this, the region needs to facilitate innovation and new market creation by SMEs and start-up businesses.

In the world of the 2020s and beyond, this means for most businesses having access to full fibre broadband and 5G technology. Such access, the CCR believes, could unlock billions in business productivity and competitiveness, and lead to the development of new markets, workplace agility and the creation of start-ups. It’s likely to be one of the biggest drivers of prosperity over the next decade.

The UK Government is fully committed to developing digital infrastructure, with 15 million premises expected to benefit from full fibre by 2023. Full fibre is essential for the roll-out of 5G technology. Every £1 invested in full fibre is forecast to result in an economic uplift of £11 over 15 years. That could make a big difference to the region’s lagging GVA.

The CCR Regional Cabinet is determined that all the region’s citizens will be able to enjoy the full benefit of this latest technological revolution. To do this means ensuring that full fibre broadband is available to homes and businesses in every part of the region, not just in the cities. Only then will the CCR be able to fulfil its commitment to the widest and fairest geographical spread of the benefits of the £1.2bn City Deal.

Among the proposals the Regional Cabinet agreed to recently was the roll-out of full fibre broadband to 330,000 premises in towns, small settlements and large villages, with the roll-out expected to take four years. The proposal has come from a global private sector infrastructure company, and would involve both installation of new fibre and use of existing OpenReach assets. It would be delivered on a wholesale basis, meaning any internet service provider could provide local services.

The full programme would likely require investment of £220m, with the CCR providing £50m as a loan. The Regional Cabinet has agreed to commence to carry out early stage due diligence.

The Regional Cabinet also agreed to explore the development of the Wales 5G programme. This is a programme that seeks to harness the benefits of 5G technology for businesses and communities across Wales. It builds on a Rural Connected Communities Initiative, and is expected to have a total cost of £31m with the CCR considering investing £3.65m, with other investments coming from a variety of public and private sector partners.

The CCR is also considering other proposals to tackle rural hot-spots and to develop fibre installations along the Core Valley Lines for commercial use.

The CCR’s commitment to developing the region’s digital infrastructure is seen as critical to its overall objectives.

 Councillor Huw David, Leader of Bridgend Council and CCR Lead on the Digital Programme, said:

“Right now all our attention is on helping our businesses and communities through the difficulties and challenges thrown up by the coronavirus pandemic, and we are devoting our time and energy to making sure we can give them all the help they require.

“But we also haven’t lost sight of the work that has already started on making Cardiff Capital Region more resilient and competitive in the future, and which we will need to help our recovery when this crisis is over.

“Full fibre broadband and 5G technology are vital to creating the sort of vibrant and sustainable region that we want Cardiff Capital Region to be in the future. Evidence shows that full fibre broadband and 5G will have a huge impact on the competitiveness and productivity of our businesses, and the resilience and sustainability of our communities. It’s vital that, as a region, we are at the forefront of this development and are not left behind.”

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