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Digital Connectivity

FSB investigates the UK’s digital connectivity and uncovers significant potential for further widespread growth

FSB digital market health check discovers tremendous innovation – and makes recommendations for closing the gap between customer expectations and service delivery.

The Federation of Small Businesses (FSB) has today (Thursday) published a comprehensive report into the health of the digital communications market for small businesses. It has uncovered a sector making good progress, but facing a gap between customer expectations, received quality of service, and promised delivery by providers. The FSB has proposed a new voluntary code of practice and an ambitious digital Universal Service Obligation (USO) to fix the issues holding back the UK’s digital ambitions.

The report found many small firms making innovative use of better connectivity to deliver real savings, better productivity and new growth opportunities. While encouraging, some business owners remain frustrated with the quality of service they are getting. In some instances this has led to many small businesses disengaging from the market – potentially missing out on the many benefits better connectivity can bring.

Some businesses have attempted to overcome these challenges by upgrading to superfast broadband, not necessarily for the advertised top-speeds, but to achieve more reliable basic speeds and connectivity. Nearly one in five (17%) small firms questioned believed that even if providers failed to deliver the higher speeds advertised for superfast broadband, they would none the less get the assurance they would get sufficient speeds to carry out essential tasks needed to realise their online ambitions.

Most small businesses recognise the opportunities of doing more online – but many are not confident they will get a quality service on which they can build the future of their business. As a result, for the first time the FSB is calling for the industry to sign up to a new voluntary code of practice which they should adopt for their business customers. Business broadband suppliers should commit to delivering minimum standards on speeds, reliability, and the transparency of customer information and contracts.

Mike Cherry, FSB Policy Director, says:

“Large numbers of small firms are using new digital technology to revolutionise the way they do business, but the market still has barriers stopping firms from seizing these opportunities. The success of the digital revolution has led to ever higher expectations from businesses and consumers which at times the market struggles to deliver. Business customers feel confused by the complexity of the market and struggle to assess how new services would benefit their business.

“A voluntary code of practice will help simplify matters and build trust between business customers and service providers. It will also allow small firms to better understand what services are available and how they can integrate these into their future business strategy. Getting this right will provide a boost to future economic growth and productivity.”

The UK already buys and sells more online than any other G20 country. However, this success story is also at the heart of businesses dissatisfaction with the quality of their broadband and mobile service – as businesses are ever more reliant on digital connectivity, and feel frustrated when the service is not as expected.

Access to fast, reliable broadband and mobile services are now essential to businesses success – broadband is the fourth utility. FSB research found 99 per cent of small firms rate the internet as highly important to their business. Over half (51%) of FSB members already offer services online and a further 15 per cent plan on doing so in the future.

FSB members say the service they get often falls short of what they need, or have been told to expect. The FSB calls for this issue to be addressed by agreeing to a new Universal Service Obligation (USO), which sets a minimum speed of at least 10Mbps. Providers should also be challenged to advertise minimum speeds as opposed to the current practice of advertising maximum possible speeds.

Mike Cherry continued: “UK businesses and consumers have enthusiastically embraced digital communications, giving us a head start on our international competitors. But we cannot afford to be complacent. Consumer expectations and new technology are already overtaking past ambitions. We need to do even better, reaching a universal minimum of a least 10Mbps while also building greater trust and reliability.”

The report, ‘Reassured, optimised, transformed: driving digital demand among small businesses’, is being launched at a roundtable event in London. The event will address the findings of the report, chart the future of digital communications for small firms and work out how the future of broadband can unleash new economic growth. Around the table will be Ministers, industry leaders, providers, and innovative small firms who use digital communications to drive their businesses. Attendees include:

  • Ed Vaizey, Minister of State for Culture and the Digital Economy
  • Mike Cherry, FSB Policy Director
  • Jon Steinberg, Public Policy and Government Relations Manager for Google EMEA (Chair)
  • Bill Murphy, BT Managing Director Next Generation Access
  • Andrew Heaney, Talk Talk Director of Strategy
  • Peter Kelly, Virgin Media Business Managing Director

The event will take place on Thursday 10 September, 8.00am – 9.30am in London. Attendees are by invitation only. Journalists wishing to attend should contact the FSB Press Office.

The Kent business angle

 

Roger Williams, Digital Ambassador to the EU and Kent FSB broadband project lead, says “Kent businesses have clearly stated their desire for faster speeds and greater reliability. Where there is a service available, uptake and application of broadband technologies is certainly high in Kent. However, there are considerable concerns that there is significant investment across Europe to deliver full fibre solutions that will leave UK infrastructure and access speeds in the dust. On behalf of our members across the county, additionally:

  • We would like to ensure that the USO enables national investment in broadband infrastructure in a way that does NOT overlook businesses in favour of residential properties. The goals for the current UK Superfast Broadband deployment are set on a “per property” covered. Therefore where there is competition for funding, two households with single occupiers will gain superfast access over one business with 100 staff. There are many FSB members across Kent who are suffering as a direct consequence of this approach.
  • While broadband uptake in the UK is strong, there is a lot more to do to help businesses make good use of digital solutions. A key aspect to this is in educating employers and staff and developing skills and understanding to apply digital technologies to support their business success. In Kent we will be developing workshops to help businesses engage with digital technologies.
  • And finally while a minimum speed of 10 mbps  would represent an improvement, we should note that the UK government, and more importantly the rest of Europe are set on achieving a minimum of 50 mbps by 2020. We need to not only engage with fast broadband, but ensure we drive demand for Ultra and Giga fast solutions for the future, or risk being overtaken by the rest of Europe.

Following the round table event will be a live Twitter chat at 10am to discuss the issues facing small businesses wanting to get online. Participants are encouraged to use the #FSBChat hashtag and direct questions to @FSB_Policy.

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