Superfast broadband brings £9bn extra turnover for UK SMEs

Local businesses in areas covered by the government’s superfast broadband roll-out are making more money than ever before, according to a report

Small and medium-sized enterprises (SMEs) located in areas covered by the government’s roll-out of superfast broadband services (Broadband Delivery UK, or BDUK) have seen a combined £9bn increase in turnover since receiving the boost to their service speed, according to figures just published.

In an Ipsos Mori-produced report, The evaluation of the economic impact and public value of the superfast broadband programme – an assessment of the impact of the superfast broadband roll-out from 2012 to 2016 – the Department for Digital, Culture, Media and Sport (DCMS) also revealed a £690m net increase in gross value added (GVA) to the UK economy, a reduction of 9,000 Jobseekers’ Allowance claimants and 2,500 fewer long-term benefits claimants, with 49,000 new jobs created overall.

DCMS claimed that for every £1 invested in BDUK by government and local authorities, the programme has delivered a benefit of £12.28 for businesses. It also said there was a “strong indication” that high take-up rates through the programme have encouraged network builders to expand their commercial broadband roll-out.

“Our roll-out of superfast broadband across the UK has been the most challenging infrastructure project in a generation, but is one of our greatest successes,” said digital minister Margot James. “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.”

Superfast broadband can be defined either as a service capable of delivering speeds above 24Mbps (the threshold used by DCMS) or 30Mbps (the threshold used by Ofcom). However, it should not be confused with full-fibre – also known as fibre-to-the-premises – broadband, which can generally deliver ultrafast speeds of over 100Mbps.

Superfast broadband is almost always delivered using fibre-to-the-cabinet (FTTC) technology, which uses fibre backhaul to street cabinets and copper cables to bridge the last mile between the cabinet and the premises.

About five million homes and businesses can now access a superfast service through BDUK, with take-up running at 45%, double the expected rate, which, as previously reported, has seen millions returned by Openreach to advance the programme further still.

Openreach CEO Clive Selley said: “It is great to see businesses across the UK reaping the benefits of faster broadband speeds and I am proud of the leading role that Openreach has played in helping to deliver the government’s roll-out of superfast broadband – one of Britain’s great engineering achievements.

“We have also recently introduced a raft of lower wholesale prices to help drive higher take-up of faster fibre services, which will help to further fuel the boost to the UK economy.”

Read more about broadband

  • Recently established full-fibre broadband network builder BFN has ambitions to connect new-build homes to ultrafast services.
  • The Digital Scotland Superfast Broadband roll-out is targeting 25,000 additional homes and businesses in the Highlands and Islands region.
  • Since new advertising standards around broadband were introduced in May 2018, most providers have cut the speeds they advertise, or stopped making speed claims altogether.

Evan Wienburg, CEO of Bristol-based full-fibre service provider TrueSpeed, said: “Today’s research demonstrates the huge benefits that broadband can have to UK businesses, but let’s not get carried away. The majority of the current infrastructure remains a makeweight solution that won’t support future connectivity needs – it’s the full-fibre network roll-out stats that should set the benchmark for success. 

“The government is on the right track, but in the Southwest, which has the lowest superfast coverage in England, there are still many underserved communities in which local businesses cannot access cloud-based tools, where home-working is a non-starter, and where growing numbers of urban commuters spend their mornings clogging up the roads rather than driving UK productivity.

“In the next, game-changing evolution of our infrastructure, we cannot afford to let these communities slip further behind the rest of the country.”

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