The EU referendum is rapidly approaching and with it the possibility of Britain voting to leave the European Union (EU), causing a so-called “Brexit”.
In recent years, the EU has had increasing regulatory control over the UK telecommunications industry, with the intention of streamlining rules across the 28 member states.
The most recent example of this is the EU being the decision-maker on the merger between UK mobile operators Three and O2, with the European Commission having the final decision and not Ofcom (the UK telecoms watchdog) or the UK Competition Market Authority.
The EU’s ruling also includes capping mobile phone roaming charges, which brings benefits for British consumers and which, outside the EU, would be very difficult for the UK government to replicate. The EU has ruled that by 2017, mobile roaming charges will be totally scrapped and by leaving the EU, British consumers could miss on these benefits.
Another important factor to take into consideration is a Brexit impact on telecoms infrastructure investment. Infrastructure investment is of critical importance to the telecoms industry and the EU has released an Investment Plan for Europe worth €315bn to invest between 2015 and 2017. Currently focusing on digital infrastructure – particularly broadband, this funding and other programmes aimed at helping rollout high-speed broadband may not be available for the UK if leaving the EU.
Beside infrastructure, when it comes to the telecoms market, equipment is as equally important as the infrastructure itself. As a country, the UK imports far more telecoms equipment than it exports. Not many mobile phones or phone systems are made here – most of them are imported.
EU trade agreements will stay in place for two years if the UK votes to leave. Furthermore, Brexit campaigners say that if the UK does leave, it could negotiate its own deals with the countries that do manufacture the equipment. Would the UK get better deals? Would the cost of devices go up or down? Like much of the debate there is a lot of uncertainty.
Overall, UK telecoms companies are largely in favour of the UK remaining in the EU. Led by all major UK mobile operators (now including BT through EE) they are overwhelmingly backing the campaign to remain in the EU.
With the current market consolidation moves between network operators across Europe, and despite the fact that mobile operators are set to loose a big chunk of revenue with the end mobile roaming charges, UK telecoms companies still prefer to remain in the UK and face these challenges rather than face the economic uncertainty of a “Brexit”.
So if your company is uncertain of the impacts that a potential Brexit could have on your business communications, contact Shape Networks on 0207 015 2100 or firstname.lastname@example.org and a member of our team of experts will gladly answer all your questions with a FREE consultation.
- The UK’s mobile market is the largest in Europe, worth £14bn annually1
- There are 8000 communications companies in the UK1
- 270,000 people work for UK communications companies1
- If the UK vote to remain in the EU, UK mobile operators will face a loss of up to £500m per annum2
- 1 http://news.cbi.org.uk/business-issues/uk-and-the-european-union/case-studies/telecommunications-and-the-eu/
- 2 http://commsbusiness.co.uk/news/brexit-could-spike-uk-tariffs/