Telecommunications, or as they’re most colloquially known today; internet and mobile phone networks, have evolved over centuries from the olde worlde days of telegraphs and the landline. Until 1982, the primary telecommunications system in the UK was the Post Office Telecommunications, with the BBC and Independent Broadcast Authority controlling the broadcast transmitter sites. British Telecom, what we know today as BT, was formed during privatisation as the sole supplier of the telecommunications industry in the UK, which was subsequently broken up to create competition. With a myriad of choices now available to the British public, and new technologies flooding to market, the privatisation model has genuinely worked for telecommunications, providing customers with enough option that the supply stays reliable and affordable. But as digital technologies proliferate, the question is, can these companies keep up?
As society and technology advances into industries never before dreamt of like that of instant internet communications owned by international digital behemoths like Google and Facebook, the industry has made it clear that private firms perform eloquently in the sector. The providers of such digital communion offer this vital service as the paradigms of communication shift from the handwritten to the typed, with private investment funds allowing the firms to shift quickly in the ever-transforming digital field. Between broadband that drags with it the defunct landline, and mobile service providers, there is a massive array of companies we can choose to entrust our social connectivities. The market is flushed with companies offering their wireless services, from the giant BT, to Vodafone, Virgin, EE, TalkTalk, Sky and all the others. Providing anything between mobile phone contracts to broadband with TV lines thrown in, these firms pit themselves as the ones to get you connected.
Despite all the choice available, the UK’s original provider still maintains a vast stronghold on the market. According to the industry’s ombudsman, Ofcom, this year BT holds more than 43% of the market share in voice services, and nearly a third in broadband. Virgin media comes at a paltry second with 9% for voice services, with all the other firms taking a share of the rest. With BT making connections of its own, having bought EE for £12.5 billion in 2015 with the switch that came into effect in April this year, their weighty position will most likely soon top the mobile phone network market shares.
But it may be unwise for BT to commit to further expanding their portfolio for the moment, as an ongoing saga of accounting ‘mishaps’ over the last couple of years has resulted in billions of pounds in losses, millions in payouts and stock prices tumbling. In 2016, the company made a ‘technical discrepancy’ that cost them £530 million. It’s real term – fraud – was discovered in the depths of the companies Italian branch, who had jumbled the figures to make them more appealing to investors and using loans off the books to pay for expenses. The CEO of the BT group handed the blame to ‘a few rogue employees’, with the CEO and COO of BT Italia being suspended in response. But this may be more of a scapegoating mission, as the company soon found itself with more financial misplacements. It seems that despite their massive stature, BT just can’t find good accountants anywhere, as the company unearthed another accounting error this year as it revealed a pension deficit underestimated by £500m.
Despite BT’s balance sheet mishaps, they are consistent with their claims to customers that it will roll out ‘superfast broadband’ across the nation through its functional division Openreach that allows other suppliers to tap into the network. With claims to instant connectivity, no more buffering wheels, and something very futuristic sounding like fibre optics, perhaps their supply to the nation could forgive their unusual accountancy methods. But as the bright posters for ‘Superfast Fibre Here Soon’ peel off the street cabinets years after they were slapped on, the question is, where is it? In fact, most houses in the UK struggle finding even reliable connectivity, let alone Ultrafast. A survey by CityFibre this year found that over three-quarters of UK households are frustrated by their lackadaisical internet connection, with 56% saying their unreliable supply deters them from working from home. As the country slips to 35th in global internet speed rankings, it’s clear that BT and it’s competitors promise for backbreaking internet speed has yet to be achieved.
The problem lies in the ground, where the same copper wires designed for landline connections are now being repurposed for the internet. Despite lofty promises that they would be replaced, this slow, clunky infrastructure from pre-internet days connects over 96% of homes today and is not efficient at delivering internet supply. Homes may be partially fibre, up until the street cabinet – then copper up to your house, leaving the digital databits chugging along pipes installed before the internet was even a glimmer in hyperspace. Despite this hybrid, part-fibre, part-copper set up clearly not delivering the true advertised promise of ‘fibre’, the Advertising Standards Authority (ASA) have ruled that it is not misleading because people don’t really know what fibre is anyway. But a further study by CityFibre has found that 24% of people think they already have fibre cables connected to their homes, and 45% believe, within good reason, that services advertised as ‘fibre’ deliver it as standard. Chief Executive of City Fibre, Greg Mesch, blames BT Openreach for their ‘deliberate lack of investment’ into fibre connectivity. The organisation are now taking the ASA to court for their avoidance of the issue.
As digital technologies continue to push the boundaries of what was thought to be possible in a microchip, and home-based working contracts rise with more companies than ever relying on internet services, those supplying the means to communicate digitally are at risk of failing their one duty; to keep us reliably connected. Embroiled in financial scandals and leapfrog acquisitions, the telecommunications industry may be too wrapped up in its own affairs to notice the writing on the wall – perhaps that’s just as well because it could soon be the only way we can message each other.