Small and medium sized businesses in ten major urban centres are now able to apply for grants of up to £3,000 to upgrade their broadband connections to at least 30Mb.
Office of National Statistics figures[1] show that 85.5% of UK businesses still access the internet through DSL and just 10% get speeds of over 30Mb.
The Government's Broadband Connection Voucher scheme[2] has £100 million to give to businesses between now and September 2015.
Broadband Connection Vouchers
SMEs can choose to spend the money on:
- getting their building connected to the BT fibre to the cabinet (FTTC) network or Virgin Media's cable network,
- upgrading their line to receive a business grade service like Leased Line or,
- upgrading their premises to get services from altnets like Hyperoptic, which can provide speeds of up to 1Gb.
Altnets or business grade services may offer the best service for many small businesses but, Choose Founder Lyndsey Burton says today, as it stands business owners may struggle to find out about them.
The scheme will need to keep it simple to succeed, and ensure that grants don't just go to the biggest ISPs.
Lyndsey Burton, Choose Founder, comments:
"Many small businesses are stuck with poorly performing broadband that could really affect their bottom line. The trial of the voucher scheme has shown that the demand for better business broadband is there: now businesses have more reason than ever to go to the time and effort to upgrade."
"However, it's still early days and we believe that the scheme could do more to make it as simple as possible for businesses to access the right services. There are a dazzling number of registered suppliers - 50 in Manchester, for example - for businesses with limited resources and, potentially, limited experience in this area to sort through."
"Unless local schemes go to more effort to explain the differences between suppliers, these grants could end up going to the biggest suppliers by default, which may not be the best outcome for businesses or the broadband network as a whole."
It's for these reasons that Choose has published a simplified guide to the Connection Vouchers scheme, which includes information on whether the investment will be worthwhile for companies and, if so, which services might offer the best value for money.
Keeping broadband competitive
In September, the Public Accounts Committee (PAC) found that the tender process for the Government's flagship rural broadband programme Broadband Delivery UK (BDUK) had severely disadvantaged smaller ISPs.
"The sole provider BT has been placed in a quasi-monopolistic position," the committee chair concluded[3].
As part of their Connection Voucher application, businesses must get a quotation from a registered supplier for the cost of the work to be carried out.
To keep the scheme fair for all the suppliers, the connection vouchers website presents these suppliers in a random order, which is different for every site visitor but the accompanying information is very basic: only the services available, which don't vary much between providers, are only explained briefly on the Connection Vouchers site.
Choose believes that more should be done to stop the biggest ISPs winning out in competitive situations like this 'by default'. Measures to help businesses choose between suppliers could go some way to achieving this goal.
Benefits of business broadband
The Government recently released a report[4] on the economic impact of improving broadband services throughout the UK.
That report concluded that, "Over our modelling period (to 2024), these interventions are projected to return approximately £20 in net economic impact for every £1 of public investment."
The researchers came to that conclusion after predicting how far faster broadband would make firms and individual telecommuters more productive (clearly a lot, as that makes up the bulk of the increase in economic activity), as well as how much it would increase participation in the labour force and safeguard employment that might otherwise be lost.
Researchers did concede that their predictions were based on very limited data, however.
Notes for editors
Choose is a consumer site dedicated to helping people make more informed choices.
Choose has been covering the broadband market since 2004 and has published a simplified guide to the scheme here.
- The Connection Vouchers site is here
- The ONS E-Commerce and ICT Activity bulletin 04/12/13 is here
- The PAC report on BDUK is here
- The Broadband Impact Report is here
