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Second Report: 5G market diversification and wider lessons for critical and emerging technologies

Science, Innovation and Technology Committee HC 450 Published 4 February 2021
Report Status
Government responded
Conclusions & Recommendations
30 items (20 recs)
Government Response
AI assessment · 30 of 30 classified
Accepted 12
Accepted in Part 5
Acknowledged 10
Not Addressed 3
Government response
Fifth Special Report - 5G market diversification and wider lessons for critical and emerging technologies: Government Response to the Committee’s Second Report of 2019-21 · published 29 Apr 2021
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Recommendations & Conclusions

30 items
1 Recommendation Accepted
Para 14

The Government’s ‘5G Supply Chain Diversification Strategy’ provides an overview of the Government’s intentions for...

Recommendation
The Government’s ‘5G Supply Chain Diversification Strategy’ provides an overview of the Government’s intentions for addressing the current lack of vendors in the UK’s 5G infrastructure equipment market. The Government itself acknowledges that this will take time. Although the decision … Read more
Government Response Summary
The government agrees with the urgency of diversification and commits to responding to the Diversification Taskforce report before summer recess. This response will detail the implementation strategy, including specific deliverables, milestones, and the approach to future R&D investment.
Department for Science, Innovation and Technology
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2 Conclusion Acknowledged
Para 22

The Government is seeking to attract existing vendors to the UK market in order to...

Conclusion
The Government is seeking to attract existing vendors to the UK market in order to diversify the telecommunications vendor market in the short-term. One of the major barriers faced by such companies is the requirement of British network operators for … Read more
Government Response Summary
The government acknowledges the committee's observation that the provision of older network technologies is a major barrier to diversification. It states it is working with mobile operators, suppliers, and users to establish a clear roadmap for the long-term use and provision of network services, including the potential sunsetting of 2G and 3G technologies.
Department for Science, Innovation and Technology
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3 Recommendation Accepted in Part
Para 23

In addition to considering the case for transitioning away from 2G and 3G technologies, the...

Recommendation
In addition to considering the case for transitioning away from 2G and 3G technologies, the Government should propose measures within the next six months that could facilitate market entry by existing vendors in the near-term. It should consider options for … Read more
Government Response Summary
The government is working with mobile operators, suppliers, and users to set a clear roadmap for transitioning away from 2G and 3G technologies. It commits to supporting R&D for innovative deployment methods like standalone 5G and Open X2 but declines to mandate specific technical solutions, preferring to encourage competition and innovation instead.
Department for Science, Innovation and Technology
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4 Conclusion Accepted
Para 29

The Government is right to support the development and adoption of open standards and increased...

Conclusion
The Government is right to support the development and adoption of open standards and increased interoperability as a potential means of diversifying the telecommunications equipment vendor market. It is also right to identify Open RAN as a prominent approach to … Read more
Government Response Summary
The government reinforces its commitment to Open RAN and open standards, citing an initial £250 million investment for R&D. It also details ongoing efforts to ensure UK market interests are represented at global technical standards bodies to support interoperability and security.
Department for Science, Innovation and Technology
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5 Recommendation Accepted
Para 30

The Government should support Open RAN and other efforts to drive the adoption of open...

Recommendation
The Government should support Open RAN and other efforts to drive the adoption of open standards and greater interoperability. While the success of Open RAN is not guaranteed, the Government should encourage the deployment of Open RAN to ensure that … Read more
Government Response Summary
The government accepts the recommendation, highlighting that its Diversification Strategy already supports Open RAN and similar technologies. It has committed an initial £250 million investment for R&D in open technologies and will ensure UK market interests are represented at global technical standards bodies.
Department for Science, Innovation and Technology
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6 Recommendation Acknowledged
Para 33

The first live networks using Open RAN are being deployed, with one having launched in...

Recommendation
The first live networks using Open RAN are being deployed, with one having launched in Japan last year. The Government should evaluate these initiatives and report regularly on what lessons can be learned from foreign experiences to inform the UK’s … Read more
Government Response Summary
The government agrees on the crucial importance of regular information sharing and engagement with international partners to inform the UK's diversification strategy. It is actively working to foster discussion and collaboration internationally, including with G7 partners and bilaterally, but does not commit to specifically evaluating foreign initiatives or providing regular reports within six months as requested.
Department for Science, Innovation and Technology
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7 Recommendation Accepted
Para 36

We heard evidence during our inquiry supporting the Government’s assessment that network operators’ preference for...

Recommendation
We heard evidence during our inquiry supporting the Government’s assessment that network operators’ preference for vendors with proven track records acts as a barrier to potential market entrants. The Government’s proposals to establish testing and validation facilities, and to reduce … Read more
Government Response Summary
The government confirms that the UK Telecommunications Laboratory is being established as a key element of its R&D approach, with work progressing rapidly and extensive industry consultation underway. The Lab will enable new suppliers to demonstrate product performance and security, ensuring trust in validated equipment for network integration.
Department for Science, Innovation and Technology
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8 Conclusion Accepted
Para 43

Measures to support research and development form a major part of the Government’s ‘5G Supply...

Conclusion
Measures to support research and development form a major part of the Government’s ‘5G Supply Chain Diversification Strategy’. Nevertheless, the total funding of £250 million for initial implementation of the strategy is significantly smaller than the tens of billions of … Read more
Government Response Summary
The government clarifies that its initial £250 million investment in R&D aims to supplement existing investment and agrees with the committee on the criticality of coordinating R&D across academic and commercial activities. It commits to setting out a clear, long-term vision and developing a coordinated and strategic approach to research, development, and innovation.
Department for Science, Innovation and Technology
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9 Recommendation Accepted
Para 44

The collaborative research and development networks that the Government seeks to develop to support diversification...

Recommendation
The collaborative research and development networks that the Government seeks to develop to support diversification of the telecommunications market should encompass relevant groups at universities and research institutes as well as small- and medium- sized enterprises and large companies. The … Read more
Government Response Summary
The government agrees with the need for coordinated R&D and states it has invested £250 million. It commits to setting out a clear, long-term vision, detailing further steps before summer recess, and developing a coordinated, strategic approach to strengthen UK capability in telecoms R&D.
Department for Science, Innovation and Technology
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10 Conclusion Not Addressed
Para 48

There is strong support for the establishment of common testing facilities for new 5G infrastructure...

Conclusion
There is strong support for the establishment of common testing facilities for new 5G infrastructure equipment, to provide a variety of services that could help to drive diversification. The National Telecoms Lab—which appears to be the main facility proposed by … Read more
Government Response Summary
The government refers to its initial £250 million investment in R&D for diversification and its broader strategy to stimulate alternative supply chains. However, it does not directly address the committee's observation about the National Telecoms Lab's heavy focus on security testing alone.
Department for Science, Innovation and Technology
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11 Recommendation Acknowledged

In addition to conducting security testing and validation, the Government should ensure that the research...

Recommendation
In addition to conducting security testing and validation, the Government should ensure that the research and testing facilities established through the diversification strategy also drive market diversification by stimulating collaboration and supporting the development and commercialisation of new technologies. (Paragraph … Read more
Government Response Summary
The government agrees with the importance of coordinating R&D to drive outcomes and has invested £250 million in R&D for diversification. It commits to strengthening UK capability and developing a strategic approach for research and innovation, with further steps to be set out before summer recess.
Department for Science, Innovation and Technology
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12 Recommendation Not Addressed
Para 52

Testing facilities do not need to be situated in one physical location.

Recommendation
Testing facilities do not need to be situated in one physical location. The Government should ensure that any new testing facilities complement existing facilities, and are designed with potential developments in 5G technology in mind to guard against future redundancy. Read more
Government Response Summary
The government's response outlines its initial £250 million investment in R&D for diversification and its commitment to a long-term vision and strategic approach for R&D and innovation. However, it does not address the specific recommendation regarding the design of new testing facilities to complement existing ones and guard against future redundancy.
Department for Science, Innovation and Technology
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13 Conclusion Accepted
Para 56

New vendors of 5G telecommunications equipment face challenges in scaling up their production rapidly enough...

Conclusion
New vendors of 5G telecommunications equipment face challenges in scaling up their production rapidly enough to meet network operator demand and compete with incumbent vendors. Although the Government’s diversification strategy identifies this barrier to market entry, it defers details of … Read more
Government Response Summary
The government acknowledges the importance of scale for new suppliers and states it is actively pursuing opportunities within its 5G Testbeds and Trials programme to prioritise open-interface technologies and new market entrants. It is also considering opportunities in mobile private networks to support vendor diversification.
Department for Science, Innovation and Technology
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14 Recommendation Accepted
Para 57

The Government should align its strategy for diversifying the 5G vendor market with its support...

Recommendation
The Government should align its strategy for diversifying the 5G vendor market with its support for rolling out 5G network coverage. Wherever the Government provides funds for expanding 5G coverage, it should look for opportunities to simultaneously support vendor diversification, … Read more
Government Response Summary
The government is actively facilitating 5G deployment and pursuing opportunities within its funded programmes, such as 5G Testbeds and Trials, to prioritise open-interface technologies and new suppliers. It is also looking at mobile private networks to support new market entrants and scale, thus aligning diversification with 5G rollout.
Department for Science, Innovation and Technology
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15 Recommendation Acknowledged
Para 60

The Government identified the concentration of intellectual property rights in the hands of established vendors...

Recommendation
The Government identified the concentration of intellectual property rights in the hands of established vendors as a barrier to market entry. It commits in its diversification strategy to working with industry bodies to address this, although the proposed work is … Read more
Government Response Summary
The government acknowledges that intellectual property rights are a potential barrier to diversification and states it is currently considering options for monitoring patent essentiality and discussing this complex issue with international partners and industry.
Department for Science, Innovation and Technology
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16 Conclusion Acknowledged
Para 70

Long-standing factors have driven consolidation in the telecommunications vendor market over many years, so it...

Conclusion
Long-standing factors have driven consolidation in the telecommunications vendor market over many years, so it is critical that the Government adopts measures to maintain market diversity as well as to drive the initial diversification. Network operators will be integral to … Read more
Government Response Summary
The government acknowledges the importance of market diversity and the role of network operators, referencing an initial £250 million investment in R&D to drive diversification. It notes ongoing work with operators and states further steps will be set out before summer recess, aligning with the need for measures to stimulate the market organically.
Department for Science, Innovation and Technology
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17 Recommendation Accepted in Part

The Government cannot rely solely on removing barriers to market entry to diversify the telecommunications...

Recommendation
The Government cannot rely solely on removing barriers to market entry to diversify the telecommunications vendor market, but must also ensure that network operators actively pursue diversification and act to maintain the diversity achieved. This will require a combination of … Read more
Government Response Summary
The government accepts the need for measures to incentivise diversification, citing an initial £250 million R&D investment and ongoing work with network operators. While they will set out further steps before summer recess, they do not commit to publishing specific measures with an indicative timetable within the recommended three months.
Department for Science, Innovation and Technology
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18 Recommendation Accepted
Para 74

Of Ofcom’s two principal duties, it has appeared to have given less prominence to “further[ing]...

Recommendation
Of Ofcom’s two principal duties, it has appeared to have given less prominence to “further[ing] the interests of citizens in relation to communications matters” than it has to “further[ing] the interests of consumers”. Ofcom must ensure that it pursues both … Read more
Government Response Summary
The government agrees with the importance of Ofcom's role in security, noting that new powers under the Telecommunications (Security) Bill will expand Ofcom's responsibilities. It is also considering updating the Statement of Strategic Priorities to emphasize telecommunications security.
Department for Science, Innovation and Technology
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19 Conclusion Accepted
Para 79

The UK’s telecommunications market accounts for a small proportion of the global market.

Conclusion
The UK’s telecommunications market accounts for a small proportion of the global market. International co-ordination will therefore be critical to the success of the UK’s diversification strategy. The Government’s 5G Supply Chain Diversification Strategy acknowledges this fact, and states the … Read more
Government Response Summary
The government agrees on the critical need for international coordination and is committed to building a global coalition for telecoms diversification. It has made this a priority for the UK's G7 presidency and is proactively engaging with international partners bilaterally to identify opportunities for collaboration.
Department for Science, Innovation and Technology
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20 Recommendation Accepted in Part

The Government should seek to establish a dedicated, standing forum for international co-operation on diversifying...

Recommendation
The Government should seek to establish a dedicated, standing forum for international co-operation on diversifying the telecommunications market, encompassing as many like-minded countries as possible and covering aspects including: research and development; adoption and deployment; standards; and overall strategy. This … Read more
Government Response Summary
The government agrees on the need for international cooperation on telecommunications market diversification and intends to build a global coalition. It has made telecoms diversification a G7 priority and is engaging bilaterally with international partners, though it does not provide a specific timetable for establishing a dedicated standing forum.
Department for Science, Innovation and Technology
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21 Recommendation Acknowledged
Para 85

There is a strong risk that the urgent security challenges faced by the UK’s telecommunications...

Recommendation
There is a strong risk that the urgent security challenges faced by the UK’s telecommunications sector are indicative of a wider, and growing, geopolitical development. Throughout our inquiry, we have heard of the prospect of a growing technological and regulatory … Read more
Government Response Summary
The government acknowledges that 5G issues are indicative of wider geopolitical and technological challenges, stating that how norms and standards are developed will have far-reaching effects. It points to several forthcoming strategies, including Digital, National Data, Innovation, Defence Science and Technology, and AI Strategies, which will collectively address the UK's approach to critical and emerging technologies.
Department for Science, Innovation and Technology
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22 Recommendation Accepted in Part

The Government must treat the current issues in the UK’s 5G vendor market as an...

Recommendation
The Government must treat the current issues in the UK’s 5G vendor market as an indication of a much wider geopolitical, technological challenge. The character of the UK’s response, and that of other like-minded nations, will have profound implications for … Read more
Government Response Summary
The government acknowledges the profound implications of technological divergence and commits to promoting innovation and working with international partners. However, it does not commit to publishing a White Paper within twelve months, instead stating that various forthcoming strategies (Digital, Data, Innovation, Defence S&T, AI) will collectively outline its approach to critical and emerging technologies.
Department for Science, Innovation and Technology
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23 Recommendation Accepted in Part
Para 90

As part of its White Paper on global technological divergence, the Government should develop a...

Recommendation
As part of its White Paper on global technological divergence, the Government should develop a critical technologies strategy that identifies technologies that are likely to be of critical importance to the UK’s prosperity and security over the next ten to … Read more
Government Response Summary
The government agrees on the need for a long-term plan for critical technologies and aims to grow the UK's Science and Technology Power by 2030. While not committing to a single White Paper, it states that multiple forthcoming strategies (Digital, Data, Innovation, Defence S&T, AI) will collectively set out its approach. A new function in the Government Office for Science will also provide analysis.
Department for Science, Innovation and Technology
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24 Conclusion Not Addressed
Para 93

The Government has only recently considered the consolidation of vendors in the UK’s telecommunications market...

Conclusion
The Government has only recently considered the consolidation of vendors in the UK’s telecommunications market as a potential risk to national security, although it is a process that has taken place over ten to twenty years. One problem appears to … Read more
Government Response Summary
The government's response outlines a broad commitment to growing the UK's 'Science and Technology Power' and creating an enabling ecosystem, mentioning existing funding and a new analytical function. However, it does not specifically address the committee's observation that its diversification strategy only addresses 5G and does not consider the full supply chain, nor the comparison with other nations' strategies.
Department for Science, Innovation and Technology
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25 Recommendation Acknowledged
Para 94

In producing a national strategy for critical and emerging technologies, the Government should consider potential...

Recommendation
In producing a national strategy for critical and emerging technologies, the Government should consider potential risks that could develop across their full supply chains.
Government Response Summary
The government agrees with the need to consider long-term implications of critical technologies and aims to grow the UK's Science and Technology Power by 2030. A new function will be instituted in the Government Office for Science to provide analysis and insights for strategic decisions across departments.
Department for Science, Innovation and Technology
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26 Conclusion Accepted
Para 99

The setting of international standards is important for national economic competitivity and technical capability.

Conclusion
The setting of international standards is important for national economic competitivity and technical capability. The influence of British companies and officials in global standards-setting processes is diminishing. Although the ‘5G Supply Chain Diversification Strategy’ sets out the Government’s intention to … Read more
Government Response Summary
The government agrees on the importance of shaping international digital standards and clarifies that DCMS is actively engaging across various digital technical standards, including Internet, AI, and smart cities. It cites the development of EN 303 645 and efforts under the G7 presidency as examples of its broader engagement.
Department for Science, Innovation and Technology
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27 Recommendation Acknowledged
Para 100

In producing a national strategy for critical and emerging technologies, the Government should review the...

Recommendation
In producing a national strategy for critical and emerging technologies, the Government should review the relevant global standards bodies, the objectivity of their processes and the relative influence of different countries. Similar to those measures outlined in its 5G supply … Read more
Government Response Summary
The government agrees that UK engagement in shaping international digital technical standards is crucial and states DCMS is actively engaging with international standards bodies and partners across various digital technical standards topics. It highlights ongoing work including G7 presidency efforts and the role of BSI, but does not commit to specifically reviewing standards bodies or developing new measures to build British capability and influence within them.
Department for Science, Innovation and Technology
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28 Conclusion Acknowledged
Para 105

Domestic capability in the research, development and adoption of critical technologies is key not only...

Conclusion
Domestic capability in the research, development and adoption of critical technologies is key not only to economic growth and technological progress, but also to national security. It reduces dependency on foreign suppliers and governments, and allows the UK greater scrutiny … Read more
Government Response Summary
The government agrees on the importance of long-term planning for critical and emerging technologies and aims to grow the UK's 'Science and Technology Power' by 2030 through creating an enabling ecosystem. It describes broad efforts including a new analytical function in the Government Office for Science and existing funding for the tech sector, but does not specifically address the required early identification and assessment of UK and allied capabilities.
Department for Science, Innovation and Technology
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29 Recommendation Acknowledged
Para 106

In producing a national strategy for critical and emerging technologies, the Government should assess the...

Recommendation
In producing a national strategy for critical and emerging technologies, the Government should assess the UK’s domestic research and development capability for each technology area as well as the capability of its allies. As the Government looks 5G market diversification … Read more
Government Response Summary
The government agrees on the importance of long-term planning for critical technologies, aiming to grow UK 'Science and Technology Power' by 2030 by creating an enabling environment and strengthening international collaboration. It also highlights existing funding for the tech sector and a new analytical function in the Government Office for Science, but does not commit to the specific assessment of R&D capabilities for each technology area as recommended.
Department for Science, Innovation and Technology
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30 Recommendation Accepted

In producing a national strategy for critical and emerging technologies, the Government should consider the...

Recommendation
In producing a national strategy for critical and emerging technologies, the Government should consider the security of the universities, businesses and other institutions conducting research into these technologies. Although guidance for the sector has recently been developed, the Government should … Read more
Government Response Summary
The government takes seriously the need to protect academic institutions and has implemented multiple measures, including publishing Trusted Research guidance, expanding the Academic Technology Approval Scheme (ATAS), launching a Digital and Tech China Strategic Communications Campaign, and enacting the National Security and Investment Bill to scrutinise investments.
Department for Science, Innovation and Technology
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