The Business Case for Rural Broadband

Guest blog post from Bill Murphy, MD, Next-Generation Access at BT

Bill with Ed Vaizey out in rural UK

Rolling out high-speed fibre broadband to rural communities is critical to balancing the economy and levelling the economic playing field for businesses in rural areas.

Having access to quality broadband allows a business in rural Scotland, Cumbria, or Wales to compete with a business in London or Manchester. Faster broadband has already empowered many businesses, particularly SMEs. It has been shown that small enterprises who are active online are more successful, grow more quickly and reach wider markets than their peers.  This fact is particularly pertinent to the UK which, according to Ofcom, has the highest e-commerce spending among major nations, with consumers spending an average of almost £2,000 online on goods each year.  It is estimated that this year, the Internet will have contributed over £180 billion to our economy – that’s about 10 per cent of GDP.

At this year’s Broadband World Forum I want to talk about the transformation that the fibre roll-out is having on the UK’s rural business community and how it’s helping to grow our national digital economy.  The UK’s 5.2m SMEs are critical to driving economic growth.  They constitute 99 per cent of UK businesses, accounting for 60 per cent of private-sector employment and just under half of business revenue. High-quality communications services are, of course, essential to their ability to drive this growth.

A great example of how fibre has brought profound change is Superfast Cornwall, the pioneering broadband project, funded by the EU, BT and Cornwall Council.  Here, high-speed broadband deployment has been the catalyst for large scale economic growth in the region, bringing £186.1 million of economic benefit.

Independent research found 6 out of 10 SMEs were growing thanks to faster connections, 83 per cent were saving time and money with more than a quarter having created or safeguarded jobs.

With ninety per cent of UK premises already able to access high-speed fibre broadband, we are now starting to see the kind of business transformation witnessed in Cornwall happening across the rest of the country.

Take Lancashire, for example, where a training and support scheme to help local businesses get the most out of superfast broadband provided a vital boost to the local economy.  A survey of hundreds of SMEs, which undertook specialist digital courses run by the Superfast Lancashire Business Support Programme, showed well over half reporting an increase in online sales and nearly half expecting to create jobs in the next 12 months.

What these case studies clearly demonstrate is that superfast broadband has never been more important and vital to the UK economy.

The roll-out of fibre broadband has been a huge success for the UK.  As of today, Openreach’s fibre optic broadband is available to more than 23 million homes and businesses.  And thanks in the main to the Openreach rollout in partnership with government and councils, the UK is on track to hit and even exceed 95 per cent having access to fibre broadband services by the end of 2017. This is a  huge achievement but, of course, it doesn’t feel so huge if you’re in the five per cent not in the current plans. What I also want to talk about at BBWF is how BT is closing the gap by investing in our infrastructure and innovating in our network technology. This is especially significant for SMEs – given that the last five per cent is predominantly rural, with more small businesses in rural areas than anywhere else.

UK businesses have enthusiastically embraced digital communications, giving us a head start on our international competitors. But we cannot be complacent as business expectations and new technology are already overtaking past ambitions. So, as well as talking about addressing the ‘have nots’, I want to talk about how we plan to invest in the networks of the future. For example, the Federation of Small Businesses recently called for a new Universal Service Obligation (USO) – which sets a minimum speed of at least 10Mbps. This is something we absolutely want to do and I will be sharing some of the innovations we are working on to achieve this kind of future proofing of our network.

Bill will be presenting “Making the Business Case for Rural Broadband” within the Access Innovation Zone at 10:20 on Tuesday 20th October.

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