Stephen Carter calls for greater network investment

The UK internet industry could suffer if the government does not do enough to foster the growth of new networks by encouraging investment, according to former digital minister Stephen Carter.

Speaking in London at the Britain's Digital Future event, Carter, now chief strategy officer at Alcatel Lucent, outlined his view that the UK "needs telcos more than telcos need the UK ".

"Countries, like companies, have a choice to make, and many are making networks a key priority and are making incentives available to firms in order to help develop what they see as a key infrastructure requirement," he said.

"Operators are looking to reduce spend and increase revenue within the global market, and are being targeted with incentives such as tax breaks on network deployments or mergers to help improve scalability."

However, Carter said that the UK government seems to be focusing instead on large-scale issues and overlooking ways to develop investment.

"The UK has rightly focused on the macro-economic issue, and is reining in spending," he said.

"But when the budget is written and choices are made, this sector doesn't look to be one that will have an active, strategic choice to incentivise firms, as in other nations."

Carter also said that the new government was wrong to have pushed back the date for delivering the Universal Service Commitment to 2015.

"When [Labour] announced the Universal Service Commitment we were pilloried for not being ambitious enough in terms of speed or timescale, but some of the current government probably wish they hadn't opposed our proposal," he said.

"The landline duty was not perfect but it had a clear, targeted solution to an identifiable need. The UK will need to have universal connectivity, but it will have to go beyond 2Mbit/s. The question is how that will be provided."

Carter expects a form of tiered network traffic to enter the market in the near future, claiming that it is a sensible way for networks to develop.

"However, the words are written in regulatory directives," he warned. " Operators need to be able to transparently charge for differentiated services and create new forms of subscription. The debate has reached the point where people realise this is required."