TELECOMMUNICATIONS: An Introduction to UK

Regulation and Trends for 2025

Regulatory landscape

The UK telecommunications sector is governed by Ofcom, pursuant to The Communications Act 2003 (CA2003).

The CA2003 remains the cornerstone regulatory enactment governing the UK telecommunications sector. It replaced the requirement for individual licences for the running of telecoms services and facilities with a class licence regime that does not require a licence or even a notification, except where specific radio frequency spectrum is to be licensed. Communications Providers are however required to comply with the Ofcom General Conditions of Entitlement (the “Ofcom GCs”) which, in effect, are class licence terms. Over the last years, the Ofcom GCs have been updated to take into account the European Electronic Communications Code (EECC).Spectrum is licensed under the Wireless Telegraphy Act 2006 whereby Communications Providers are required to have an individual licence unless the spectrum in question is licence exempt or subject only to compliance with Class Licence conditions. 

In the author’s view, the fact that the UK has not, since 2003, generally required licensing or notification, has reduced the regulatory burden and cost on the sector and is particularly helpful in the IoT sector whereby innovative services can be launched without burdensome licensing requirements.

Market trends

It comes as no surprise that mobile network operators (MNOs) are witnessing an exponential increase in data usage whilst fixed voice services are declining. On the fixed broadband side, fibre to the cabinet and to the home is growing and this overview covers the latest Ofcom requirements for the provision of clarity to consumers regarding fibre based broadband. Artificial intelligence and automation are, as expected, becoming integral to telecoms operations. 

Importantly, at the time of writing, the outcome of the CMA decision on the Vodafone 3UK MNO merger is awaited. On 13 September 2024, the CMA set out some potential concerns and set a date of 7 December 2024 for its decision.

Environmental sustainability is a growing priority with the adoption of energy efficient equipment and initiatives to reduce carbon footprint. In fact, the author was pleased to have been a Judge for the first ESG Award in the Capacity Global Connectivity Awards and has witnessed a welcome and significantly increased investment by the telecoms industry in sustainability.

UK telecoms regulatory priorities for 2024/2025

Ofcom’s key regulatory focus for 2024/2025 includes enhancing online safety, improving telecoms security, and addressing scam calls and messages. Ofcom is also working on wholesale access markets, particularly broadband and fibre, to help ensure fair competition and consumer protection.

Important developments regarding the provision of communications services to end users – modifications to Ofcom GCs

One-page contract summary requirement

In alignment with the relatively new European Electronic Communications Code (EECC), a revised version of the General Conditions came into force on 17 June 2022, and an unofficial consolidated version was released on 3 April 2023. The consequences of these modified conditions continue to be felt by telecoms and broadband providers, as Ofcom carries out investigations of non-compliance.

Since June 2022, the amended Ofcom GCs require communications providers to give customers a one-page summary of the details and key terms of their contract. The information should include the cost and length of the contract, the speed of the service, and any early exit fees, so that customers can take advantage of the wide range of communication services available and the benefits of competition.

BT and its subsidiaries, EE and Plusnet, did not comply with these requirements until September 2023, and BT was fined GBP2.8 million in 2024 by Ofcom for these breaches. 

BT is not the only company to have failed to comply with the new GCs, as Ofcom ramps up investigations of non-compliance.

Information to consumers on the quality of their broadband

As of 16 September 2024, the Ofcom Guidance under Ofcom GCs C1 and C2 came into force. These require that consumers must now be told in clear terms about the technology that underpins their broadband service when signing up to a new deal.

The term “fibre” has previously been applied inconsistently by the UK telecoms industry and often used to describe different types of networks, leading to confusion among customers. Accordingly, as of 16 September 2024, broadband providers need to be clear and unambiguous about whether the network they use is a new “full-fibre” network, with fibre all the way to a customer’s home, or a “part-fibre”, “copper”, or “cable” network. This information must be given to consumers before they agree to purchase a broadband service, regardless of whether they sign up in person, over the phone or online. 

Providers will no longer be able to use the term “fibre” on its own.

One-touch switching

Since 12 September 2024, almost 18 months late, the UK telecoms industry finally managed to implement One Touch Switch (OTS). This represents a significant change, again mandated by the EECC, aimed at making it easier for UK consumers to switch broadband providers, allowing them to switch by contacting only their new supplier. This reduces the effort and potential complications involved in changing services and reduces barriers to entry. It also makes it harder for the losing provider to “win back” leaving consumers and it must not charge them beyond the date of termination. OTS is mandated under the new GC C7 and the OTS system is managed by The One Touch Switching Company (TOTSCo). 

Network security and resilience requirements

The Network and Service Resilience Guidance, published on 6 September 2024 by Ofcom, is relevant to all providers of public electronic communication networks and services (PECN/S). This Guidance imposes increased security duties and obligations for networks. 

Ofcom concluded that the pre-existing regulatory framework was not sufficiently clear and broader requirements must be imposed, mandating that all providers comply with the following:

• avoiding/reducing single points of failure for communication networks;
• ensuring key infrastructure points have automatic failover functionality (ensuring that failure leads to network traffic being diverted); and
• setting out the processes, tools and training that should be considered to support these preceding requirements.

One example of this change is that Ofcom is now expecting greater resilience at the “Last Mile”. Similarly, a more stringent expectation Ofcom now holds is that communication providers are expected to choose suppliers and supplies with testing of “reliability and resilience in mind”. Therefore PECN/S, must remain more vigilant than ever of their network security resilience legal obligations.

Space law

UK space law is primarily governed by the UK Space Industry Act 2018, although there is an ongoing Space Regulatory Review of 2024. 

The UK is keeping a close eye on the proposed EU Space Law, but there are no specific plans to implement the proposed EU Space Act directly. The EU Space Act proposal envisages common EU rules to manage space traffic and protect space activity from cyberthreats and debris, alongside other initiatives. While the UK is no longer part of the EU, it continues to align with international standards and best practices in space law.

Nevertheless, it is unclear when the updated EU or UK space-related legislation will be adopted.

AI regulation 

National and international bodies have been working on frameworks to promote or inhibit AI regulation with a diverse range of outcomes. International communications providers need to keep abreast of, and comply with, differing approaches to AI regulation in the US, the EU and UK.

The EU AI Act (2023) bans practices such as emotion recognition in the workplace and schools, social scoring, predictive policing (when it is based solely on profiling a person or assessing their characteristics), and AI that manipulates human behaviour or exploits people’s vulnerabilities.

Online Safety Act

Ofcom has begun to lead work to implement the provisions of the Online Safety Act. So far, it has introduced new criminal offences, such as creating deepfakes and “cyberflashing”, and published draft guidance on social media companies’ new duty to keep the public safe online. It has been consulting on new guidelines since the beginning of 2024 to help companies comply with their new duties, which are expected to be in effect from early 2025. The plan is to release a categorised list of companies and their levels of responsibility by mid-2025.

Conclusion

The telecommunications sectors in the UK and EU are undergoing significant transformations driven by technological advancements, regulatory changes, and market trends. Key areas of focus for the regulators include cybersecurity protection, network resilience and the regulation of AI, which is becoming increasingly adopted within the telecoms sector. With each year that passes since Brexit, many communications providers will find themselves having to get to grips with and comply not only with new requirements in the UK, but also with increasingly different ones in the EU, not to mention the USA (where there is a state-by-state approach to data privacy and AI).

Finally, 7 December 2024 could be a significant day for the mobile sector, if the CMA clears the ‘4 to 3’ Vodafone/3UK merger.