Innovation will help broadband prosper

Major IT vendors are starting to talk about optimising IT and making the most of your estate

It is good to see so many vested interests discussing the prospects for next-generation broadband in the UK.

The announcement of Ofcom’s latest consultation is an important milestone, and will, hopefully, allow all parties involved to debate the way forward without much of the finger pointing and acrimony that characterised the early days of broadband Britain back in 2001-02.

But given the wider economic crisis, there has to be a question mark over the plans to put the UK at the forefront of high-speed communications.

With estimates of a capital cost of up to £28bn to roll out a UK-wide infrastructure supporting bandwidth up to 100Mbit/s, the likelihood of massive private sector investment is small, certainly in the short term.

With the cost of credit so high as the banking system struggles for liquidity, the payback period for such a major initiative starts to become prohibitive. And there is little chance of government funding to make it happen.

As the Broadband Stakeholder Group points out, this presents an opportunity for smaller-scale initiatives for local fibre networks, a model pursued with some success on the continent.

But even then, with venture capital markets turning away from early-stage technology startups, it’s not a great time for any IT entrepreneur looking for cash.

This is just another example of how the clogged financial arteries will have a knock-on affect in the technology world. It’s already apparent that major IT vendors are starting to talk about optimising IT and making the most of your estate, rather than trying to push costly new products.

It’s too early to say whether or not the attempts to bail out Wall Street will be enough to minimise the knock-on effects. And when we see Microsoft planning the biggest share buyback in history to boost its stock price, it’s clear that even the most successful players are bracing themselves for a difficult period.

There has rarely been a time when smart ideas and cost-effective innovations will be more important to the prospects for the IT sector and for broadband Britain.