CMA warns lack of superfast broadband is hampering UK business innovation
03 October 2011
The Communications Management Association (CMA), part of BCS, The Chartered Institute for IT, and Federation of Small Businesses (FSB) are today warning the Government that business innovation in the UK is being seriously hampered by the lack of superfast broadband (SFB).
The warning follows the publication of results from the CMA’s Internet Opportunity Survey 2011, supported by FSB and Point Topic Ltd, and sponsored by DCMS and Openreach, which shows that nearly 30% of respondents report that they cannot get current generation broadband – internet speeds up to 24Mbps – where they want it. Although this is an improving picture over the last 4 years, it shows that enterprises still do not have universal access – 10% of businesses have no access across any of their sites. Only 14% of businesses report having SFB – speeds above 24Mbps – available at all sites.
The survey also showed that more than half of respondents say that they use current generation broadband for reasons of increased speed of communications and increased efficiencies. This is also true for the small numbers of businesses using SFB. The majority of businesses use CGB for internet browsing and e-mail. Although 65% of businesses at present had no plans to implement SFB, those likely to take up SFB when available would also seek increased efficiencies and use the service for e-mail and internet browsing. In this same group only 4% said that staying competitive was the main benefit.”
Innovation is being significantly hampered by uncertainty about SFB availability and clarity about related revenue generating opportunities. These figures support the assertion that UK-based businesses will be disadvantaged in competing with other EU businesses as the single e-market develops, encouraged and supported by the Digital Agenda.
The survey aims to provide insights into the attitudes of businesses towards superfast broadband and survey respondents consisted of small, medium and large businesses, including members of the CMA and the FSB.
Carolyn Kimber, Chairman of CMA explains: “This survey gives CMA and the Government a real insight into the internet requirements of the business community. If the UK is going to continue to compete on an international scale then we need to look at these results with a view to informing and directing policy.
“Business use of broadband is often overlooked when it comes to the discussion around the digital divide, but we can see very clearly from these results that the divide has a significant impact on the ability of businesses to thrive and compete.”
The report features the following key conclusions which CMA, FSB and Point Topic hope will assist the development of the next steps towards realising Broadband Britain.
There is widespread lack of knowledge among the business community, especially among smaller businesses, of what current generation and superfast broadband can do for their enterprise
Because of that, business demand for superfast broadband is rising more slowly than is desirable from the viewpoint of investment and innovation
The private sector alone cannot be relied on either to effectively improve awareness or to supply universal access to broadband in a timescale that will ensure that the UK keeps pace with international competitive benchmarks
There is a deep-seated and widespread belief that neither government nor regulator are doing enough to complement and support the efforts being made by the private sector
Neil Hoose, Infrastructure Chairman of FSB added: “We’re delighted that our members have been able to contribute to this invaluable snapshot. But it is worrying that small businesses are still being hampered by a lack of adequate speeds and connectivity. The internet provides a great place for businesses to seek new opportunities, innovate and to grow. So it is vital that the Government acts now to support the effective roll out of broadband to all areas. If small businesses are to realise their potential in providing much needed economic growth it is crucial that they have access to reliable and fast broadband so that they can maintain their competitiveness and do not get left behind as international competitors embrace advances in the digital economy.”
The report, which has been sent to Ministers today, features the following recommendations:
Government keeps its National Broadband Strategy under constant review and issues progress reports on achievements and updates to policy at no more than 6-month intervals
Government and Ofcom work more closely and publicly in refining and implementing the framework within which private investment can be nurtured
Government introduces a scheme for business-awareness that parallels and is modelled on that of the existing Digital Champion
Acknowledgement at the highest reaches of government of the vital importance to our economic recovery and future prosperity of universal access to broadband be matched by appropriate emphasis during the implementation of the National Infrastructure Plan.
Tim Johnson, Chief Analyst at Point Topic, says “We were very pleased to have the chance to contribute to this project. The business use of broadband is not well understood and needs just this kind of research – and more. Bringing the big-company membership of the CMA together with the Federation of Small Businesses opens up a window onto how the whole range of enterprises use broadband. The results show that the leading users are already well up with using broadband to deliver lower costs, new products and new markets. Government help will be needed to spread that kind of performance to the whole country and to ensure that businesses everywhere can access the broadband they need.”
David Harrington from CMA concludes: “Nearly 70% of respondents don’t believe that the Government is doing enough to encourage and promote investment in the infrastructure necessary for Super-fast Broadband and a similar figure think much the same about Ofcom.
“Over half of the businesses surveyed think that while private investment will be successful, it’s the government’s job to ensure that that happens. This strongly suggests that the government and the regulator need to better promote and publicise their plans for infrastructure investment along with a stimulus for businesses to adopt superfast broadband and create new opportunities.”
The survey was based around these components:
1. Establishing the extent to which businesses will actually be reached by investments in Broadband (Government’s Universal Service Commitment and private sector superfast broadband rollout).
2. Continuing to build a detailed picture of the needs of businesses, the types of services they expect to deploy and what they are prepared to pay.
3. The extent to which the existing digital divide for businesses (London and the South East lead significantly in internet use) might be changed with proposed investment both by private sector superfast broadband programmes and the Government’s support for the final third.
4. Providing clarity on whether or not the internet has disrupted some parts of industry and empowered others in a time of significant public sector cuts.
5. Assessing the opportunity cost for the UK’s internet economy against government and private sector plans