Tuesday, 04 August 2020

ONS error sees growth of telecoms sector grossly underestimated for 20 years

by Harry Baldock, Total Telecom
Wednesday 08 July 20

Telecoms prices fell around 95% in the last two decades, not the 50% previously thought

The Office of National Statistics (ONS) has admitted a major error in their calculations in a period between 1997 and 2006, showing that the telecoms industry has grown far more successfully than previously thought.     Exactly how a mistake of this scale has been made is not clear…

The Office of National Statistics (ONS) has admitted a major error in their calculations in a period between 1997 and 2006, showing that the telecoms industry has grown far more successfully than previously thought.  

 

Exactly how a mistake of this scale has been made is not clear, but it seems likely that advances in telecoms technology (particularly the rise of the internet) were not properly considered. 

 

Previous measurements showed that telecoms prices had dropped around 50% since the 90s, but new recalculations show the actual drop to be much more impressive, closer to 95%. This is a significant change – so much so that the new figures are expected to retrospectively impact metrics like national GDP and inflation, all the way up to the present day.

 

“The effect of the new deflator would increase the volume of output of the telecommunications sector and will probably increase the headline volume measure of GDP,” explained the ONS.

 

How these revised figures will affect other industries will not become apparent until the ONS has managed to recalculate the UK’s GDP, which will take until October this year. However, for the telecoms industry, the new statistics boosts the sector from a national laggard in productivity, previously named alongside the banks, to a national leader since 2010. 

 

This newly realised success of the industry was surely driven by the rapid advancement of technology, leading to telcos being able to provide greater connectivity at lower cost – indeed, in 2019, ONS found the telecoms sector to be the biggest spender on R&D for the year 2018. Nonetheless, stakeholders are sure to claim credit for themselves, ascribing this excellent growth to private sector investment, competition, and any personal points of interest. 

 

Also in the news:
France on Huawei: "There won’t be a total ban"
Iliad enters Italian fixed-line market with Open Fiber
5G-aliser – June 2020 update: Geopolitics overshadows steady progress

 

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