News & Insight

Superfast broadband boosts UK business by 9bn as we chase the rest of Europe

Jack Oneill

Local governmnent's in areas covered by the government's superfast broadband roll-out are making...

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

SMEs in areas covered by the government’s roll-out of superfast broadband services have seen a combined £9bn increase in turnover since receiving the uplift to their speed.

The findings come in a report from the Department for Culture, Media and Sport. It claims that superfast broadband has now reached almost five million homes and businesses and has delivered £12.28 benefit for firms for every £1 invested by central and local authorities.

Last month, Openreach, who run much of the UK's telecoms infrastructure, reduced the wholesale price of broadband in an attempt to boost the number of homes and businesses using fast services.

The report also claimed the broadband rollout had led to a reduction of almost 9,000 jobseekers allowance claims as well as the creation of 49,000 local jobs.

Need for speed

Still, despite this, earlier this year the UK slipped to 35th place in an annual league table of global broadband speeds, putting it in the bottom third of EU countries and below the likes of Madagascar and Bulgaria.

According to the data (carried out during the 12 months to 29 May) the UK averaged a speed of just 18.57Mbps, which put the country down four places from last year’s league table. The UK lagged behind 25 other European countries, 20 of them in the EU.

Fibre the way forward

While the recent DCME report undeniably demonstrates the enormous benefits that broadband can have to the UK economy, the country’s current infrastructure remains a temporary solution.

While superfast broadband can be defined as a service capable of delivering speeds above 24Mbps or 30Mbps, it should not be confused with full-fibre, which can generally deliver ultrafast speeds of over 100Mbps. It’s the full fibre network roll-out statistics that should set the benchmark and it’s also there that the UK lags behind the rest of Europe.

The UK government wants to see all of the UK on full-fibre broadband - rather than rely on broadband delivered over copper networks - by 2033.

Lagging behind Europe

Only 4 percent of the UK currently uses fibre, while Portugal and Spain lead the charge at 89 and 71 percent, respectively.

The percentage is even greater in certain Asian countries: South Korea is at 99 percent and Japan is at 97 percent.

Germany’s fibre-optic roll-out will benefit 40,000 households and businesses and the first customers will enjoy speeds of up to 1 Gigabyte per second by the end of 2018. The full roll-out will be complete until the third quarter of 2019.

A recent government study found that without more investment on a policy level, UK fibre connections would only be available for 75 percent of the population at most – a process that would take over 20 years to achieve.