Slow connections are stopping small businesses gaining maximum
benefit from the Internet. Is broadband the right way to
turbo-charge their online presence?
More than a quarter of small businesses are still having problems
getting the most out of the Web. Experts believe that high-speed
Internet access technologies, collectively known as "broadband",
may solve many of these difficulties.
In the US, often seen as the earliest adopter of Internet
technology, around 60% of small businesses have Internet access,
the same proportion as in the UK. However, US companies tend to
have faster connections to the Web and attract more business
online. A survey by Dun & Bradstreet has found that at least
half of US small business Web sites are generating Internet sales
compared to an estimated 10% of their UK counterparts.
The latest report by UK telecommunication regulator Oftel stated
that small businesses were considerably less satisfied with speed
of access than medium-sized rivals. Oftel believes that this is
owing to their dependency on slow, dial-up access. By contrast
medium-sized businesses were more likely to use faster ISDN
connections or fibre-optic leased lines.
The slow speed of dial-up access restricts e-mail, electronic faxes
and file transfer. For example, using a dial-up connection to
e-mail a 50,000 item personalised pricelist to 1,000 customers
would take nearly three hours.
At present two-thirds of the small businesses in the UK are reliant
on this low speed connection, which operates at around 56kbps a
second. This was fine for older text-based Web sites but as sites
become more complex, or include graphics and sound, the slow speed
makes accessing them increasingly frustrating and time
consuming.
Although some small businesses use ISDN - an early version of
broadband - or leased lines - which can offer connection speeds of
up to 4mbps - these are costly solutions to the connection
conundrum. The average cost for a 128kbps ISDN line is around
£8,000 per year and prices for leased lines are 50% higher
still.
The main alternative to dial-up is broadband technology, which has
a minimum capacity of 64kbps and can go up to 2mbps. Broadband
connections can use either high-speed telephone lines or the cable
network to provide unlimited Internet access for a fixed monthly
fee. On average, broadband access for a small business is cheaper
than both ISDN and leased lines, costing around £1,500 per year.
Broadband is much faster than dial-up. Using our earlier example,
to e-mail the same 50,000 item personalised pricelist to 1,000
customers would take as little as 20 minutes compared to three
hours with a dial-up connection.
However, at present few businesses have switched to broadband. The
technology is still very new, and this has been compounded by
delays in the rollout of the service across the nation. In
particular, BT has been criticised for being tardy in allowing
rivals to use its exchanges to develop a wider selection of
competing services.
The other major problem with broadband is poor reliability when
compared to either dial-up connection or ISDN. With around a dozen
major service interruptions in the last year, the resulting
newspaper headlines have led to widespread distrust of the
fledgling technology. BT says these problems are being addressed
and the frequency of service interruptions has fallen dramatically
in the last few months.
Most UK customers can now sign up to broadband through the major
ISPs. The few ISPs who currently don't offer broadband services are
quickly moving to offer new high-speed services.
Even the two largest ISPs in the UK, AOL and Freeserve, which have
both traditionally targeted home users, are now offering broadband
services. Together the two sector giants have a 30% share of the
small business Internet connection market and both have now started
to offer business packages that include broadband access, business
advice, Web site design and e-business facilities.
Going broadband: key issues
Advice from organisations
such as the Federation of Small Business, the Department of Trade
and Industry and the Confederation of British Industry shares a
common theme:
Using the Internet can benefit your business but you must first
have a clear idea of what you want from your Internet activities
both initially and in the future.
Calculate the cost of your existing Internet access and talk to
your ISP about what it will cost to switch to a broadband solution.
If your ISP does not offer broadband, consider rivals that
do.
The most common online strategy for small business is to provide
Internet and e-mail access for computers on the company network
first. Next many small businesses will hire a Web designer to
create a simple Web page showing details of their products and
services.
As small businesses become comfortable with Internet technology,
they may want to add some limited transaction capability to their
site. Many will also allow customers to request information or buy
items online.
Both Web design and simple e-commerce systems can be developed on a
tight budget by employing designers to work on a fixed-fee
basis.
Further information:
http://www.businessbureau-uk.co.uk/ecommerce/starting-out/isp/check_list.htm
A useful checklist for small businesses looking for an ISP
http://www.fsbdial.co.uk
The Federation of Small Business has a Web hosting and e-commerce
solution backed by Royal Bank of Scotland, Microsoft and Intel
http://www.trustuk.org.uk
A DTI and Consumer Association initiative to create a code of
practice for selling and buying goods online
We would like to hear from you!
How has the lack of
affordable, fast Internet access affected your e-business strategy?
What's the biggest obstacle that you've faced?
E-mail CW360.com and share your experiences with us
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