Half of small businesses in rural locations are dissatisfied with the quality of their broadband provision, creating a two-speed online economy which could threaten the expansion of the rural economy.
Data from a Federation of Small Businesses (FSB) showed that rural small businesses nearly double the level of dissatisfaction compared to urban small businesses, where only 28 per cent were dissatisfied.
The FSB believes that the issue will become even more significant over the next two years, as small firms become more reliant on a high quality broadband connection to do business. More than three quarters (77 per cet) said that email will be critical to their business, while more than half (57 per cent) said broadband will be essential to engaging with their customers in the next two years.
The current lack of broadband infrastructure serving small firms threatens the expansion of the £400bn rural economy. The business opportunity includes 28 per cent of all UK firms and over one million small businesses.
The FSB research uncovered rural businesses’ dissatisfaction across a number of areas, including reliability (47 per cent dissatisfied), upload speed (61 per cent dissatisfied) and download speed (61 per cent dissatisfied). This represents nearly a 50 per cent gap in reported satisfaction levels with comparable urban businesses.
“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 year,” said Mike Cherry, National Policy Chairman for the Federation of Small Businesses. “We risk seeing the emergence of a two-speed online economy resulting from poor rural broadband infrastructure.”
Improvements to the UK’s broadband provision have been made in recent years and more packages are now being targeted towards the needs of business. However, the FSB believes that more could be done, especially as just 16 per cent of rural businesses have access to super-fast broadband.
The Government’s strategy to deliver 24Mbps broadband to 95 per cent of all users by 2017 is not sufficiently ambitious, the campaign group added, especially for the five per cent of mainly rural businesses left receiving just 2Mbps, which is barely sufficient for even basic tasks like sending commercial emails.
“It’s worrying that as many as 14 per cent of UK small firms still view the lack of a reliable broadband connection as being the primary barrier to their growth,” Cherry added. “A reliable connection is now viewed as a key business requirement by 94 per cent 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 100Mbps to all by 2030,” he said.
The FSB is calling for Government to conduct a comprehensive review of broadband policy, including 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.