FSB concerns over 'two-speed online economy'

Business organisation calls for a rethink on Government broadband strategy, after research uncovers dissatisfaction in rural areas

FSB North East regional chairman Ted Salmon
FSB North East regional chairman Ted Salmon

Nearly half of small businesses based in the countryside are dissatisfied with the quality of the their broadband provision, according to the Federation of Small Businesses in the North East.

New research from the organisation showed nearly double the level of discontent among rural businesses compared to their urban counterparts, 28% of which said they were dissatisfied with their internet services.

Areas of concern included reliability (47% dissatisfied), upload speed (61%) and download speed (61%).

The findings come just weeks after Environment Secretary Liz Truss said improvements in broadband and roads infrastructure could lead to the rural economy growing faster than the urban sector over the next decade.

The FSB said it accepted improvements had been made in recent years, with 16% of rural businesses now having access to super-fast broadband and an increasing number of packages targeted at the needs of business.

However, the body, which represents around 200,000 members, said more needed to be done and suggested the Government’s aim of delivering 24Mps broadband to 95% of premises by 2017 was not sufficiently ambitious - particularly since the 5% per cent of predominantly-rural businesses remaining would receive just 2Mbps.

This FSB believes the issue will become even more important as small firms become more reliant on having high quality broadband connections.

More than three quarters (77%) surveyed for the new research said email will be critical to their businesses, while more than half (57%) believing broadband will be essential to engaging with their customers throughout the next two years.

As a result of the findings laid out in its Fourth Utility report, the organisation is now calling for Government to conduct a comprehensive review of broadband policy.

This, it said, must include measures to encourage more competition for better packages in the business broadband market, a commitment to accelerate the roll-out of 4G mobile services and prioritisation of fibre-optic provision to business parks and enterprise zones.

Ted Salmon, the FSB’s regional chairman for the North East, said: “This research paints a worrying picture of a divided business broadband landscape in the UK, and unless addressed highlights a clear obstacle to growth in the coming years.

“We risk seeing the emergence of a two-speed online economy resulting from poor rural broadband infrastructure.

“It’s worrying that as many as 14% of UK small firms still view the lack of a reliable broadband connection as being the primary barrier to their growth.

“A reliable connection is now viewed as a key business requirement by 94% of small UK businesses, yet continued poor connectivity in rural areas represents a huge missed opportunity for economic growth in many parts of the country.

“These gaps and weaknesses need to be addressed as a matter of priority, with the minimum of 10 Mbps to all business premises by 2018/19, and a pledge to deliver minimum speeds of 100Mbs to all by 2030.”

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