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How Brexit Will Affect The Telecommunications Industry
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Earlier this year, the UK voted to leave the European Union and activate Article 50 of the Lisbon Treaty. Whilst this has drastic implications for almost all areas of life, how will it specifically affect the telecoms industry?
It is currently expected that Britain will formally leave the EU at some point in or around 2019, so whilst technically in the short-term, Britain remains a member of the EU for the next few years as it begins to leave, in the long-term, many businesses and people are already starting their preparations for the future post-EU United Kingdom.
There are also currently unknown variables that will come into play once the country has actually left and the various deals get struck with other countries. We may see a 'soft' Brexit where the UK still has access to the European Economic Area (EEA) at a cost of freedom of movement for all EU citizens (similar to a deal with Norway and Iceland) or a 'hard' Brexit where Britain will be free to make its own trade agreements and not have commit to free movement rules, completely walking away from the EU. All these variables can change how many industries will be affected, including the telecoms industry.
A UK withdrawal from the European Union will mean that the Regulatory Framework, forged for and by the EU members,will no longer apply in the UK. Although this will not spring any immediate consequences on us, however, as the Regulatory Framework is already transposed into UK law. This national legislation will therefore continue to be applicable following Brexit. There are alsovarious instruments enacted by the European Commission that fall outside of the Regulatory Framework, which will no longer be applicable. These can include recommendations on non-discrimination obligations and costing methodologies for network access.
A major change that could be noticeable for the consumer will be ‘Roaming’ charges. From June 2017, roaming charges within the European Union will be abolished completely. Although the change will also come into effect in countries outside the EU (but inside the EAA) like Norway and Iceland as mentioned earlier. Before the referendum, then minister for the Digital Economy, Ed Vaizey, said “I don't know what would happen if we leave the EU, and that's the problem."
In the long-term, Brexit is likely to mean a divergence in regulation between the UK and the EU. Parliament will be completely free to legislate regulation (or de-regulation) of the national telecommunications markets as it sees fit. It is also worth noting that Ofcom will obviously no longer be required to notify the European Commission of any new draft proposals for the regulation of the UK telecoms markets. This can affect a wide variety of areas, from wireless solutions to mobile phone providers. This is especially true when it comes to net neutrality, depending on your wireless solution, you may see an upsurge or decrease in Internet speed if no law is put into place once the UK leaves the EU.
When it comes to a less broad view of Brexit, looking specifically at what it will means for companies in the UK; any entity incorporated in the UK has the right to provide telecom services in any other EU Member State, as it currently stands pre-referendum. Brexit will remove this right in respect of UK established companies.Companies from European countries that operate in the UK will also no longer have the nearly automatic right under EU law to provide their telecom services in the UK, once Britain leaves the EU.
There are also non-EU companies that operate in the UK that use it as a ‘spring-board’ to access the wider EU market. With Brexit, this will longer be the case for these businesses and may be forced to move their European HQ elsewhere, to a country that is actually in the European Union. This has been a major talking point in many sectors and industries and the telecoms industry is no different. Spanish giant Telefonica for instance, have already moved to halt plans to sell or float O2 amid all the current uncertainty.
Whilst there is still a long way to go in terms of following through with the triggering of Article 50 and actually leaving the European Union itself, the amount of variables means that we cannot possibly know what will happen to the telecoms industry in the end, we don’t even know if the UK will even leave the EU at all based on the uncertain and general reaction, it will simply depend on the deals that get struck up between the leaders of the various countries and how far they actually go. Only then will we get a clear picture of the future of the telecoms industry in the UK.
Staveley Communications is a leading provider of phone systems and IP Telephony to businesses in the UK and Europe with extensive industry experience and a credible record of providing installation and services to over five hundred clients. We supply leading vendors such as Avaya , Splicecom, 3CX and threeSWITCH. With Hosted PBX, options start at just 10 per month. Telephone systems can be leased and start from just 117 per month over 3 years.
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