With the UK prime minister set to trigger Article 50 in the next few months, Chris West, Global Head of Telecoms and Alex Brown, Global Head of TMT at Simmons & Simmons discuss the impact of Brexit on the Telecoms sector.
With the UK’s formal negotiations to leave the EU likely to start in March and expected to take at least two years, the details of the UK’s future trading relationships remain unknown.
The possible outcomes of these negotiations will affect sectors differently. However, it is very important to consider the possible impacts on local, national and international business interests.
Brexit is just one part of wider global economic uncertainty. Elections in other EU countries this year - including France, Germany and the Netherlands – may create further uncertainty and will likely determine the approach taken by the rest of the EU.
In the meantime, the UK remains open for business and continues to provide a stable legal and regulatory environment, a large international talent pool and a competitive tax regime.
Issues for the telco industry, post-Brexit
With the future stance on regulation unknown, the telco industry in the UK is more sheltered than other sectors, with the preservation of existing laws anticipated in the short to medium term.
The EU’s telecoms regulatory regime aims to apply a common set of principles and regulations across the EU. As a result, the UK’s system is strongly affected by the EU. It is also fair to say that the UK’s regulator, OFCOM, is the flagship model for others to follow.
The key issue is when official negotiations can begin without the UK getting into legal difficulties with Brussels. Until the terms of Brexit become clearer, depending on the agreement that is put in place and the speed of change that the UK implements, it is difficult to advise any action other than close monitoring of the situation.
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