Small businesses worst off for superfast broadband, according to Ofcom

Out-Law News | 10 Dec 2014 | 10:07 am | 2 min. read

Smaller businesses tend to be worse off for broadband connections than average users, particularly in urban areas, according to an official report on the UK's digital infrastructure.

Market regulator Ofcom said that its 2014 report underlined the importance of its new programme of work for small and medium enterprises (SMEs), which was announced in October. It found that 56% of UK SMEs could currently access the latest 'superfast' broadband connections, compared to 75% average coverage. This gap was even more pronounced in urban areas, where 67% SME coverage lagged significantly behind 83% average coverage.

Along with SME coverage, Ofcom found three other challenges to overall superfast broadband availability and quality: extending universal coverage to the "final 5%" of UK premises; city "not-spots" in urban areas where customers were limited to direct connections to local telephone exchanges rather than street cabinets; and the future development of next-generation 'ultrafast' broadband. Its report did not consider the high capacity 'leased lines' for voice and data used by the largest businesses.

"As a country we are continuing to make real progress, particularly in the roll out and take-up of superfast broadband and 4G mobile services," said Ofcom chief executive Ed Richards. "But there is more to be done. We need to continue asking whether collectively we are doing enough to build the infrastructure of the future, and to maintain the competition that benefits consumers and businesses."

Ofcom said that those homes and businesses that were not yet able to access superfast broadband should be upgraded even where it was "technically complex and expensive".

The regulator has developed a new interactive mapping tool, designed to allow consumers and small business users to check coverage for a range of digital services in their area and compare this to the UK average. Data included in the maps is correct as of June 2014, and will be updated annually, according to Ofcom.

'Superfast' broadband is generally defined as delivering speeds of at least 30 megabits per second (Mbps), while 'ultrafast' connections could potentially deliver up to one gigabit per second (Gbps). Ofcom analysed the availability of superfast broadband delivered to SMEs with at least one employee by the major providers BT, Virgin and KCOM.

According to Ofcom, the average UK household or small business is now downloading 53 gigabytes (GB) of data over a fixed broadband line every month; the equivalent to 35 feature films and a 77% increase on 2013. This growth is being driven both by the increasing use of high-bandwidth services, such as video streaming, and faster connections that support multiple users. Ofcom said that 15% of premises were still struggling to achieve a 10Mbps connection, which it said was the minimum for this level of activity; while 3% did not even have a basic 2Mbps connection.

"Businesses rely on telephone and internet services to sell goods and services, connect to customers, deal with suppliers and manage their workforce," the report said. "Beyond this, many digital businesses rely on broadband services for the actual delivery of their products and services. Reliable and high quality broadband and mobile connections are becoming ever more important to commerce and to the wider economy."

Ofcom is due to report on the "availability, choice and quality" of communications services available to SMEs in spring, according to the report.

Preferred communication channels were changing, according to the report, which found that the use of 'voice over IP' services to make telephone calls over the internet had risen to 35% of adults while the number of UK homes with a TV set had fallen for the first time. There are now nearly one million homes with broadband internet access but no TV, highlighting the growing importance of catch-up content consumed on devices such as tablets, smartphones and games consoles to consumers, Ofcom said.

The report also found that the average data usage of mobile phone owners had increased by 55% to 1.5GB per month over the last year, and was forecast to increase four-fold by 2018. It said that more had to be done to improve mobile coverage and quality of service ahead of this increasing demand.