Next generation broadband will deliver long term cost benefits to the UK, in spite of an estimated £16 billion cost to roll it out.

This is the verdict of the government's advisory group on broadband and digital convergence, the Broadband Stakeholder Group, in its report 'A Framework for Evaluating the Value of Next Generation Broadband'. It says better productivity and better use of applications will offer strong advantages over current broadband.

But more studies need to be conducted to assess what sort of return operators will gain and when it will happen, the government advisory group states.

It says operators would be wise to first delay deployment in the short term while they study the associated costs and expected return. In the mean time, it says, the government and regulators should work with operators to create an environment conducive to investment in the rollout.

Antony Walker, chief executive at the BSG, said: "It is tempting to jump in feet-first but it matters more to do this right than to do it now. There is a lot of uncertainty about issues on both the demand and supply side and much that we can learn from experience elsewhere without adverse affects in the short-term."

"On the other hand, the UK can't wait too long. If widespread network deployment didn't happen in the medium term (perhaps three to five years), then this report suggests that the UK could be losing out."

The report also warned that it will take longer to deploy next generation broadband than it took to deploy the current generation, and that some areas might be beyond the reach of operators.

In a separate report also issued today by the BSG, called 'Models for efficient and effective public-sector interventions in next-generation broadband access networks', the advisory group says the government should watch proposed next generation broadband pilot projects carefully for lessons on its rollout, including how to set technical standards.

It also says that the government should be vigilant of a digital divide being created where some areas are given next generation broadband well before others.