The rural economy contributes over £400 billion of the UK’s Gross Value Added (GVA) – 40%. Rural businesses employ 13% of the working population and represent 25% of all registered businesses in the UK. However, rural areas are still being held back by poor telecoms coverage, in particular high-speed internet connectivity and 4G coverage.
The latest report from Ofcom shows that only 41% of rural areas have complete 4G coverage. This is less than half of the coverage levels in urban areas. It’s similar for broadband coverage, although this is a common problem across EU member states.
The financial implications, to the UK’s rural economy, are difficult to calculate, but it’s easy to work out what the issues are:
With today’s society being encouraged to buy local and support small businesses, a lack of high-speed telecoms in rural areas is going to make this difficult.
However, we believe there are ways that the issue of poor rural coverage can be tackled. The first three require government and operators to work together, whilst the last two are actions that rural businesses can implemented immediately (and at very low cost) to get themselves connected to the Internet with workable speeds.
We currently don’t have roaming in the UK, but if we did (as we do in the rest of Europe) this could make a massive difference to rural areas where coverage is often sparse and there are fewer operators. So far, Ofcom has failed to ask operators in the UK to allow roaming.
Sometimes known as wholesale access, rural roaming means you can move between mobile operators’ networks based on signal strength. As your provider’s signal drops, you can move to another provider. With 91% of the UK landmass getting signal from at least one provider, this would significantly improve connectivity availability. Only 77% of the country has good coverage from all four networks.
How the operators decide to share out the costs is up to them!
5G is set to, supposedly, transform how we use data. With ultra-fast transmission speeds, we will be able to do more from wherever – unless you’re in the country. The high frequency wavelengths used by 5G can only travel in straight lines and over much shorter distances than 3/4G.
However, Ofcom’s release of the 700Mhz frequency band would allow 5G rollout to much more of the country. It would be a little slower, but slower is better than nothing (which is what is currently available in many areas). It’s great to see that Ofcom has set rural coverage requirements within the contracts the mobile operators are bidding for.
National and EU governments have made £billions available to support the rollout of telecoms connectivity to everyone. The UK government has spent in excess of £6 billion, through BDUK, to take coverage up to 95%.
European Agricultural Fund for Rural Development (EAFRD) grant funding is available with 921 million Euros allocated between 2014 & 2020 to help rural economies. This includes connecting rural locations to high speed connectivity as it is a key way to help rural economies.
The key is how this money is spent, and if it will be enough to bring rural connectivity to 100%. Our feeling is that this is unlikely – and even if they do manage it, they may find that the technology has moved on the connectivity they have funded is already out of date.
Micro-businesses (1-4 staff) and remote workers can benefit in a number of ways from making use of the growing number of rural co-working spaces. Suitably positioned so they have high-speed connectivity, they bring a range of benefits to their members:
It’s likely we’ll see more and more of these popping up in rural areas and even if the government does take proper action to improve rural connectivity, it’s likely many people will still opt to use these hubs.
High-speed broadband and fibre are usually words used in the same sentence. However, the cost of rolling out fibre to the cabinet (FTTC) is as high as £100,000 per cabinet. This cost has to be paid by someone. It cannot be passed to the user and the operators aren’t prepared to pay these figures, so it isn’t being implemented. Government support (BDUK) has taken coverage up to 95.1% of UK premises.
Although satellite used to be an alternative go-to option, it is becoming less popular, more expensive (in particular the installation), and 4G now, generally, offers better speeds.
So, in the areas where high speed broadband isn’t available, 4G can be an acceptable substitute. With data costs reducing on an, almost, daily basis, 4G doesn’t have to be an expensive option unless your business is an exceptionally high data user. Providing you have decent access to 4G, this is a good option, that a business can implement immediately, with no (or very little) additional investment in equipment. You can literally be up-and-running in minutes. And the data speeds can be pretty good too.
Given the importance of communications, telecoms (including internet connectivity) it is an important element to get right to boost rural businesses and the rural economy.
ABOUT THE AUTHOR
Mike Ianiri is Director of independent telecoms brokerage Equinox. Mike works with companies, charities and other organisations to help them choose the right telecoms packages for their needs and thereby reduce their costs. He is particularly knowledgeable on the integration of IT and telecoms in business. www.equinoxcomms.co.uk