UKTIN seeks to rejuvenate British telecom R&D

The UK Telecoms Innovation Network (UKTIN) has been formally launched during an event in London. Light Reading spoke to Nick Johnson, who was appointed in February as UKTIN's director, to get a better sense of the organization's aims and his views on the state of the UK's telecom industry.

UKTIN is being delivered by a consortium comprising the Digital Catapult (a nonprofit backed by the UK government), Cambridge Wireless (an association representing various tech and telecom companies), the University of Bristol and WM5G (another government-backed organization set up to support 5G deployment in the West Midlands).

The UKTIN is being funded by the UK government as part of the £250 million (US$312 million) Open Networks Research and Development Fund announced last year, of which it will receive £10 million ($12.6 million). Its goal is to create a telecom innovation ecosystem by bringing together members of the industry, government and academia. A key focus will be to help new entrants into the market.

Figure 1: UKTIN Director Nick Johnson speaking during UKTIN's launch event in London.
(Source: Tereza Krásová/Light Reading)

After two years, a spending review will take place, which will likely lead to follow-on investment. UKTIN as such may also continue to exist in some form, says Johnson.

Given the levels of funding probably needed to boost R&D, Light Reading asked the UKTIN director where the money may come from.

On top of the government funding, Johnson says the "equipment of capitalism" can be leveraged. He points out that venture capital will likely invest if it sees a good business case, while foreign direct investment is another potential source of capital. Companies including Samsung and Ericsson have already established research facilities in the UK, he notes, which brings money into the sector as well as valuable skills.

Connecting the dots

The overarching goal of UKTIN is to help identify promising research areas and connect them with possible partners and suitable funding opportunities. Johnson says UKTIN's supplier guidance is already helping firms connect with potential partners.

Another important mission for UKTIN is to bridge the skills gap plaguing the UK telecom sector. Johnson pointed out this is a key issue for the industry and one that exists at all levels, citing the example of post-doctorate researchers and insufficient numbers of deployment staff. "That's a major break on growth," Johnson concludes.

The source of the problem, he thinks, is the perception of telecom as a less attractive career choice, with fields such as AI and fintech deemed more desirable. A skills gap is not, however, the only issue the UK's telecom industry is facing.

Carrier groups, Johnson says, have been "in a cruise mode almost, trying to stay airborne." He sees their challenges as falling revenues, with limited opportunities for growth, noting that they tried to find revenue opportunities outside their conventional business with limited success.

He sums up the telcos' situation as follows: "They've got all the customers they're going to get, their customers are very price conscious, and they are in a constant price war."

For suppliers, Johnson says, this means targeting a risk-averse market that is nervous about change. But innovation opportunities exist, he says, pointing to the example of Rakuten. The Japanese company claims it can run a full-sized mobile network with a relatively small number of people, as opposed to the thousands that are needed typically.

While Johnson stresses that he isn't qualified to judge Rakuten's claims, he says if this kind of innovation is achievable then it needs to be supported.

"The innovation is focused on the concerns of the big carriers, […] whereas for these smaller growth markets that level of automation in network management is as crucial," he adds.

The government's role

Another market segment with a separate list of challenges is private networks for manufacturers. Their requirements are more focused on securing the right tools and having the connectivity needed to support technology such as mobile robots. Meanwhile, "if you're trying to operate a robot wirelessly with 5G you need particular throughput and quality of service to control the robot precisely," notes Johnson.

He disagrees with the idea that the private sector should be left to solve its own problems, pointing to the telcos' difficult financial situation and citing the UK government's Wireless Infrastructure Strategy.

The document states that of the four operators in the country, two are "operating below acceptable levels of return on capital," as Johnson puts it. "But their solution to that is to allow a merger of Vodafone and Three. So is that the right solution? I don't know."

"If you let capitalism take its course, then you will end up in a monopoly situation," Johnson argues, saying the same pressures could force further consolidation in the market. In his view, a higher power – in this case, the government – needs to get involved.

Johnson is also critical of the consequences of consolidation on the vendor side, saying their numbers have dropped from six or eight twenty years ago to between two and four now, if the smaller Samsung and NEC are counted alongside Ericsson and Nokia.

According to Johnson, the market needs to be rejuvenated. He points to the example of AT&T, which "got too big" before the US government decided to break it up. "At least by taking that action you are rejuvenating that market and changing things up so that there is more energy and value creation, job creation, wealth creation, all of those good things," he says.

Rather than tearing apart a particular company, however, the plan is to inject diversification into the supply chain, says Johnson.

Critics might say this in itself does not necessarily prevent consolidation from happening further down the line. It could also be argued that consolidation down to three players does not automatically mean any further mergers would be allowed.

UKTIN's mission, however, seems to be in the very early stages. During one of the panel discussions, Dimitra Simeonidou of the University of Bristol conceded that identifying possible strong areas of UK innovation is part of the task ahead. She cited photonics as an example of an area where UK companies are already successful.

Asked how long it may take for UKTIN to have a meaningful impact, Johnson noted that the organization's supplier guidance is already bringing benefits for companies looking for vendors and partners. Johnson expects it to generate economic benefits over UKTIN's two-year lifecycle.

Other activities, he admits, are more long term, such as identifying gaps in the R&D landscape and providing input on government roadmaps and initiatives.

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— Tereza Krásová, Associate Editor, Light Reading