The founder of North East telecommunications company Odyssey Systems has branded Labour’s plans to provide free high-speed broadband to every UK home and business as “destructive and reckless”.
Mike Odysseas, managing director of the Stockton-based firm, said that full-fibre broadband might even be obsolete by the time Labour finally rolls out its plan by 2030.
He also warned that its pledge – which involves nationalising Openreach, BT’s broadband infrastructure division – would leave the industry’s 600 Internet Service Providers (ISPs), including Virgin Media and Talk Talk, without a market or a future.
This, he said, threatens the future of the 180,000 people currently employed in the sector.
Mike Odysseas said: “The absurdity of this election pledge is glaring when you consider 95% of homes already have access to a fixed superfast broadband product that is capable of providing 30 megabits (Mb) or more.
“Resources would be better spent concentrating improvements on the five percent of hard-to-reach homes and businesses located in more remote areas. Rather than wasting many billions on this unworkable and wasteful proposal, it would be better invested in the NHS, education or fighting crime.
“Labour is essentially planning to spend £33,000 per household that doesn’t currently have superfast broadband. There isn’t much you can’t do at much lower speed, the only feature that really suffers is high definition streaming, but in most cases standard definition is fine.
“Full-fibre is nice to have if you have a house full of teenagers simultaneously viewing high definition streams as they download computer games whilst updating their tablets. However, this situation isn’t going to impact the economy.
“There are many solutions to increasing broadband speeds in rural areas, all cost very little to set up and achieve the 30Mb required for superfast broadband.”
Labour has costed its plan at £20bn, a figure dwarfed by the Conservative’s £83bn estimate, whilst BT puts the cost at between £30bn and £40bn.
However, the Labour plan does not detail the level of investment required for research and development, nor the financial impact on third party ISPs.
Mike Odysseas said that the telecoms market is made up of 600 ISPs – the largest of which are valued at £30bn – and it is the resulting competition that has led to the development in recent years of faster speeds, greater coverage and cheaper prices.
He argued that operators such as Virgin Media may also have to be nationalised as they run their own cables between the exchange and the customer, adding that Labour had also failed to consider the difference between residential and commercial connections, with ISPs offering specialised services, often without BT involvement.
“Most ISPs will go out of business, all apart from the nationalised provider, and without competition, this plan is unlikely to provide best value for money.
“Private investment and current superfast fibre projects would cease, and this destructive and reckless election sweetener would signal the widespread eradication of the telecoms sector, threatening the livelihoods of its 180,000 employees.”