Recommendation 27

HM Government Accepted

The Government agrees that the UK market for vendors is far from satisfactory, and we recognise that there is a need to work at pace to make early progress on diversification. The Government announced in the National Infrastructure Strategy that it has committed an initial investment of £250 million, to kick off work to deliver our key priorities. However, we recognise that it is long term market failure that has brought us to the position where the market has consolidated to a small pool of scale suppliers. We have developed a targeted 5G Supply Chain Diversification Strategy, published on 30 November, to diversify the supply chain and strengthen the UK market. We are talking to a range of suppliers about the barriers they face in entering the market and how we can accelerate the realisation of our long-term vision for the telecoms access market. We are also exploring ways to incentivise research and development in the UK telecoms sector, such as alternative 5G deployment models, and accelerating the development of ‘interoperable’ equipment—kit which can be used by multiple vendors—and making it standard across the sector. This in turn would bolster the position of vendors to enter the market and strengthen our position on 5G. The Government is committing to diversifying the UK telecoms supply chain and has appointed the Telecoms Diversification Taskforce to support it in this work. The Taskforce, which is composed of leading figures from industry and academia, is already providing independent and expert advice to the Government—turbocharging our diversification strategy.