Recent research demonstrates that superfast broadband connectivity opens up a variety of opportunities for businesses and can be considered a key economic driver. Modern enterprises need fast, reliable and secure connections to give them the edge in their relevant markets. But are they being provided with what they need? Unfortunately not. Recent Ofcom figures show that over 40% of small and medium-sized enterprises (SMEs) are still struggling to obtain a suitable level of connectivity. In my opinion, one of the reasons for this is our outdated regulatory framework. .
Connectivity is essential for SME innovation
Advances in communications and operational technology mean that even the smallest businesses can have a global outlook. Today, UK enterprises are not only competing with their geographical neighbours, but with a range of global companies as well. With greater access to higher quality connectivity, the 5.2 million SMEs which make up 99% of the UK private sector would be better placed to thrive in the digital economy.
Last week in a parliamentary debate, it was highlighted that a number of SMEs do not yet have access to superfast broadband. The House of Commons discussion outlined that this perceived digital divide is preventing SMEs from being able to innovate, which will also have an impact on the country’s economy. During the debate, one of the members pointed out that the Federation of Small Businesses sees access to fast, reliable broadband as now essential for a modern business and should be considered alongside other utilities such as gas, water and electricity.
Are businesses being provided with what they need?
The UK government recognised the importance of this requirement and invested £100 million to create a Broadband Connection Voucher scheme in 50 cities across the UK. SMEs across the country were offered vouchers of up to £3,000 to help with the installation costs for a superior broadband connection through this programme.
However, the current UK regulatory framework –designed in an era when it was all about obtaining basic connectivity – is failing to allow the right level of innovation and competition, so hindering the provision of business connectivity. Today, the connectivity needs of business customers are much more demanding, diverse and specific than they used to be and our 12 year old regulatory framework no longer fits the bill. Today, connectivity service providers are not incentivised to invest in new networks or technology. Due to this, even organisations in key business centres are struggling with outdated and slow connectivity, which is holding them back. You just have to look at the progress of other European countries, like France, which have been more decisive in adapting their regulatory model to suit their business landscape.
A welcomed improvement was seen earlier this year when Ofcom made the decision to open up access to dark fibre networks to service providers. However, more still needs to be done. The regulator must give connectivity providers access to the UK’s existing infrastructure in areas that are not sufficiently competitive. This will accelerate the roll-out of high-speed networks across the country and provide businesses with much-needed high-speed connectivity.
Other countries are leading the way, where the UK is falling behind. In other countries, for example, when the incumbent delays rolling out fibre to a business park, the regulation states that its duct network is automatically open to alternative providers. That means SMEs in France have better connectivity options than enterprises based in the UK.
Businesses are looking to make the most of the myriad of emerging connected technologies, but fundamental changes to the UK’s telecoms regulatory framework are needed to enable that. Competition needs to be increased. Continued foot dragging would mean that UK businesses will not be able to compete on both national and global level – and our economy will suffer as a consequence. The priority should be to create more competition at the right level. This would enable service providers to create a range of services that better addresses the business requirements of our prized SME community, which contributes an astounding £3.5 trillion to the UK economy.
By Barney Lane, Director of Regulation at Colt