Alex Holt, Partner and Head of TMT, KPMG in the UK, commented:
"The telecoms sector will be one of the hardest hit by the upcoming changes to business rates as the rateable valuations of infrastructure assets are reassessed. The industry is set to face a 42 per cent hike in business rates in the first year alone as a result. This factors in the annual limit of rate increases the Government sets for all businesses. But even with the caps, there will be little respite for the sector with further increases in the coming years.
"Telco providers need to be encouraged to boost spending on the ultra-fast infrastructure that the UK needs to stay competitive. The 30mbps upgrade, proposed by the House of Lords on Wednesday, will require significant financing from the private sector, but increasing rates threatens to stunt investment as the potential value of returns fall. The economics of this will not deliver equality across our cities, regions and rural areas.
"It's too early to forecast the potential impact of the rate reform on consumers. But it's inevitable that a proportion of these costs will trickle down in terms of wholesale charges, which could result in higher broadband prices."
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