Back at Connected Britain 2025 - Infrastructure, AI, and the Cost Tightrope

It was great to be back at Connected Britain last week, reconnecting with clients, press, and some new faces. The energy across the event was palpably upbeat, with an evident sense that the UK is pushing forward on its path to a digitally connected future. With that being said, it’s clear that there’s still a proverbial ladder to climb when it comes to achieving our future connectivity goals.

Momentum achieved, but a journey in progress

One of the major announcements at the show came from Ofcom, declaring that the UK remains on track to achieve full-fibre coverage by 2027. A lofty goal, but sending a powerful signal to the world that this race is being run in earnest – and that the UK is intent on winning it. 

Yet, hitting “fibre passed” targets is only half the battle. A large part of the conversation at Connected Britain raised monetisation, adoption, and crucially, core-network robustness as significant hurdles to overcome before true coverage can be achieved. There’s been a huge push for last-mile connectivity (FTTx), but unless deeper networks, data centres, and traffic backhaul scale up, the ecosystem risks encountering bottlenecks.

This issue is now becoming particularly pressing, given the surge in AI and data centre investment across the UK. These deployments demand not just edge connectivity but strong middle and long-haul infrastructure to carry vast data volumes, and support ultra-low latency. While Connected Britain itself wasn’t the venue for multi-billion-dollar announcements, the event coincided with a number of landmark AI moves that framed the conversation and generated a buzz of opinion and commentary. 

• Microsoft recently announced a $30 billion investment into AI and cloud infrastructure between now and 2028, including the development of what is expected to be the country’s largest supercomputer, built in partnership with Nscale. 
• NVIDIA pledged £2 billion to support the UK’s AI start-up ecosystem, backing computer infrastructure, research, and innovation hubs across London, Oxford, Cambridge, and Manchester.

These, and other AI and data centre investments, ultimately depend on connectivity (from resilient fibre to scalable backhaul) to deliver on their promises. They’re creating a deeper link between data centres, AI, and the networks that tie them all together. 

Our client Ciena is at the heart of this, seeing huge demand for building networks to support the data centre boom. Many other companies at Connected Britain are focused on ensuring that fibre, backhaul, and core networks are ready to handle the surge in AI and compute workloads, highlighting the critical role of infrastructure in the UK’s digital future.

Government cost burden looms large

One of the most talked-about moments at the show came when BT’s CEO, Allison Kirkby, warned that telecom operators in the UK shoulder “government-inflicted costs” that are around ten times higher than in comparable European markets, such as Germany and the Netherlands. She cautioned that the industry may have reached its limit in absorbing such costs, and that investor confidence — especially ahead of the upcoming UK budget — depends on clarity, stability, and reforms in regulatory, planning, and fiscal policy. In other words, lack of appropriate central support is putting investment in connectivity projects at significant risk of failure.  

This is more than rhetoric: for infrastructure projects with multi-year paybacks, cost certainty matters deeply. Many in the sector are now watching closely, amid speculation that taxes and levies could increase. Higher corporation taxes, business rates, or energy levies could raise operating costs and reduce investment appetite, potentially slowing the rollout of fibre, 5G, and other critical infrastructure. 

The upcoming November budget will be pivotal for the immediate future of connectivity. Operators are obviously hoping for measures such as tax reliefs or incentives to support network investment, but the real risk is that fiscal pressures could make costs worse, further testing the resilience and pace of the UK’s digital infrastructure build-out.

What this means going forward, and what to watch

• Policy and regulation are bottlenecks: Momentum on fibre and 5G is strong, but without reforms in planning, permitting, taxation, and regulatory consistency, deployment timelines could stall.
• From “passed” to “connected”: Deploying fibre is step one; driving adoption, ensuring affordability, supporting digital skills, and enabling uptake is step two.
• Core networks must scale: Last-mile is necessary but not sufficient. Backhaul, peering, interconnects, resilience, and capacity all need to keep pace, especially under AI and data demand.
• Cost stability matters: Investor confidence depends on predictability around taxation, compliance, and energy costs. Without it, funding and rollout risk slowing.
• Readiness for AI investment: The UK is attracting major AI and computing projects, but the open question is whether connectivity infrastructure will be ready in time to support them.

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