Procurement · 18 December 2017

Superfast broadband still unavailable to a half a million small firms

Business owners in rural areas and trading estates were found to have the lowest levels of connectivity
Business owners in rural areas and trading estates were found to have the lowest levels of connectivity

Around 500,000 small UK business owners are still unable to access superfast broadband speeds crucial to company growth, as a new report highlights the failure of government to achieve its connectivity target.

The findings, published by regulator Ofcom, showed that small businesses have yet to see the improved broadband speeds accessed by the wider population, while a disparity continued to exist between city firms and those in rural areas.

By May 2017, superfast broadband, defined as download speeds of 30 megabits per second (Mbit/s) or more, was available to 91 per cent of UK homes and business, up from 89 per cent in 2016.

While around 2.7m, or 84 per cent of, small and medium-sized firms can access superfast broadband or faster, around half a million are operating under 30Mbit/s. Some 230,000 small business owners are even unable to reach download speeds of 10Mbit/s and upload speeds of 1Mbit/s.

The connectivity problem was greatest for firms in rural areas and those in business parks and trading estates, with around 65,000 owners relying on internet speeds lower than 10Mbit/s.

In 2015, the government proposed a Universal Service Obligation (USO) that set of a target of delivering speeds above 10Mbit/s for every home and office premises in Britain. Ofcom’s latest findings confirmed that more needed to be done to reach this target.

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“Broadband coverage is improving, but our findings show there’s still urgent work required before people and businesses get the services they need,” said Steve Unger, chief technology officer at Ofcom.

Mike Cherry, FSB chairman, said poor coverage and slow speeds continued to “blight” small firms across the UK, and rural areas in particular.

“While it’s good to see superfast coverage has continued to improve, half a million businesses still don’t have access to superfast broadband,” Cherry said.

“The rate of improvement doesn’t appear fast enough to make inroads into the UK’s productivity problems.”

Without access to fast and reliable small businesses are unable to keep pace with services such as videoconferencing and video sharing, which depend on both good download and upload speeds.

Cherry added: “Businesses want to embrace digital technology to compete and enhance their productivity, but to do this they need a decent connection and good quality service.”

Highlighting the failure of policy makers to deliver the USO, Cherry raised concerns that “no decision” had been made about how to deliver it.

“Government needs to step up and make a decision without delay about whether to proceed with the regulatory approach or take up BT’s offer to expand its services.

“It’s essential that small businesses do not continue to be left behind due to poor broadband.”

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ABOUT THE EXPERT

Simon Caldwell is deputy editor at Business Advice. He has a BA in politics and communications from the University of Liverpool, and has previously worked as a content editor in local government and the ecommerce industry.

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