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UK government cites superfast broadband delivery as key to surge in business turnover

The UK government has released the findings of its latest research, which estimates a £9 billion turnover increase for local businesses in areas covered by its rollout of superfast broadband.

Undertaken by market research organisation Ipsos Mori on behalf of the Department for Digital, Culture, Media & Sport (DCMS), The Evaluation of the Economic Impact and Public Value of the Superfast Broadband Programme is an assessment of the impact the rollout has had in its first years (2012-2016).

The DCMS revealed in February of this year that it had delivered on its superfast broadband manifesto commitment to 95 per cent of homes and businesses by the end of 2017. This was overseen by Broadband Delivery UK (BDUK), and saw around £1.6 billion of public investment from both local and national authorities (see UK government delivers superfast broadband target, still more to be done). It is estimated that more than 1 million extra UK homes and businesses will gain access to superfast speeds, taking superfast coverage to 98% of the nation over the next few years.

As well as the documented £9 billion surge in business turnover, the new report also found a £690 million net increase in gross value added to the UK economy and a reduction of almost 9,000 individuals claiming jobseeker’s allowance. According to the research, the programme has delivered £12.28 benefit for businesses for every £1 invested by the government and local authorities, and there is a strong indication that high take up rates of the superfast programme have encouraged telecommunications industry to expand their own commercial broadband projects.

In a statement regarding the new findings, minister for digital, Margot James said: ‘Our rollout of superfast broadband across the UK has been the most challenging infrastructure project in a generation but is one of our greatest successes. We are reaching thousands more homes and businesses every week, that can now reap the clear and tangible benefits that superfast broadband provides. We are helping to ensure the downfall of the digital divide.’

The government is introducing a universal service obligation (USO) that will mean everyone in the UK has access to fast and affordable broadband by 2020 (see UK government rejects BT's voluntary USO proposal). It has also recently set out plans to deliver nationwide gigabit capable (1000Mb/s) connectivity by 2033 as part of its modern industrial strategy.

Clive Selley, CEO at Openreach has commented on the research findings: ‘It is great to see businesses across the UK reaping the benefits of faster broadband speeds and I’m proud of the leading role that Openreach has played in helping to deliver the Government’s rollout of superfast broadband.’

Phil Sorsky, vice president of service providers international at CommScope has also responded, highlighting the importance of extending fast reliable broadband to all areas of the UK. He said: ‘Consumers, employees and businesses alike benefit from all forms of connectivity, and the fibre rollout is key to unlocking the UK’s full entrepreneurial potential. Access to fibre broadband is particularly key for UK businesses in the run up-to Brexit, as companies come under even more under pressure to deliver on a global scale. With that in mind, it is critical that everyone across the country has the same access to the opportunities enabled by connectivity.

‘Speedy and reliable connectivity supports economic growth and an improved quality of life for everyone, and we are pleased to hear superfast broadband has now reached around ten million homes and businesses. While there are many technologies that can offer superfast speeds over 100Mbps, we will only see speeds in excess of 500Mb/s or even 1Gb/s when we see fibre rolled out across the entire country. With the advent of new technologies such as artificial intelligence and the Internet of Things, the significance of superfast broadband to UK businesses will only continue to grow in the coming years.’

Jeremy Chelot, CEO of Community Fibre, has stated that he does not believe the government goes far enough in its recent proposals for the roll out of full-fibre infrastructures. He explained: ‘Basic internet access is simply no longer enough. As the majority of the connections in the UK are copper-based, it is evident that the UK is not fully prepared for the digital future. Recent OFCOM research has found that the average household is doubling its data consumption every two years, be it watching online video or accessing government services, and so adequate broadband is swiftly becoming vital.

‘To keep up with these demands, quality true full-fibre broadband must be regarded as an essential utility. With a greater number of vital services going online and demanding a high-speed connection, strong and decisive action will be required sooner than many anticipate. It is therefore not enough to measure success by simple internet connections- the number of true full-fibre connections is the only measure policymakers should be interested in.

‘Furthermore,’ argued Chelot, ‘a clear, legally enforceable definition of full-fibre would make clear to the public and building managers that copper connections do not constitute true full-fibre and that their homes are not fully future-proofed. With concerns over the UK’s broadband competitiveness increasingly becoming a political issue, especially within the context of a hard Brexit, the current government’s plans to deliver “full-fibre” by 2033 should focus on adequate investment, clear definitions and a commitment to delivering genuine full-fibre for all.’

James Warner, director sales, marketing, and product at Glide Business has also issued a response to the research: ‘This report is a clear and strong endorsement to the fact that high performing broadband infrastructure directly corelates to the growth and performance of the local/regional economy that also makes a very clear case for further investment to move away from the increasingly less relevant speeds of superfast and look towards the gigabit capable services business sorely needs.

'Only by targeted, regional investment in getting these business premises up to scratch will companies have the infrastructure they need to grow and adopt new technologies – which is crucial in galvanizing regional economic development.’



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