Procurement · 28 July 2016

Broadband access remains key hurdle to rural micro business growth

One-in-five self-employed workers in Scotland and Wales cited problems growing their business due to insufficient broadband connections

Micro business owners in rural parts of the UK require urgent broadband action, according to freelancer association the IPSE.

Research published by the organisation has revealed that twice as many micro business owners and self-employed work in rural areas as in urban areas, with a majority still not having access to a superfast broadband connection.

With access to superfast internet increasingly considered vital to micro business growth, insufficient investment in broadband infrastructure could be costing the UK significant losses in productivity.

Responding to Ofcom’s recent ruling that Openreach – the nationwide broadband provider owned by BT – must legally separate from its parent company in the interests of efficiency, the IPSE has called on the communications regulator to set renewed targets to ensure Openreach steps up its level of investment to improve broadband.

IPSE policy and external affairs director Simon Vicker said that Ofcom should give Openreach a clear target of six months for initial improvements to be made, before the government should consider splitting up BT entirely.

“Increased investment in broadband is long overdue,” he said. “BT has so far been sluggish to act on improving broadband speeds across the UK, and urgent action is needed if the company is to retain control of the network.”

Vicker welcomed the government’s recent proposal to introduce a Universal Service Obligation (USO) that would give every home and business premises in the country the right to at least a 10Mbps broadband connection.

“The government has taken a big step forward [proposing USO] and it now needs to ensure this is developed quickly and universally, with fibre optic broadband a requirement for all new house building projects,” added Vicker.

The association found that as many as one-in-five self-employed workers in Scotland and Wales cited problems operating their business due to insufficient broadband. Vicker went on to say that enabling these businesses to run efficiently should be one of Britain’s top priorities.

“In the post-Brexit landscape the flexible labour market is vital to the success of the UK economy. Superfast broadband for rural micro businesses therefore cannot be overlooked on the grounds of cost.”

Co-founder of PCA Predict, an online technology micro firm based in a rural location near Worcester, Jamie Turner, recently told our sister title Real Business about the impact of poor broadband infrastructure.

“Slow speeds and painfully long installation times hold us back,” said Turner. “We had to have the local village dug up to bring in fibre which was incredibly expensive for us. The installation took almost six months to complete, and our connection costs almost £500,000 a year – it’s pretty rock solid but few businesses can justify even a tenth of that cost.”

Last month, BT revealed which parts of the UK would be first to benefit from its commitment to get one million businesses set up with ultrafast broadband by 2020. Honing in on urban centres, Bath, Bradford, Bristol, Liverpool, Manchester and Salford are expected to be the first areas on BT’s list.

Check out the new measures Vodafone have brought in to make life easier for UK small and micro business owners. 

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Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.

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