15 Jun 2024

Lack of government incentives stifling UK business connectivity expansion

Make UK manifesto

Research from Neos Networks has revealed that while 42% of UK businesses plan vital connectivity upgrades as part of growth strategy, one in every five receives insufficient internet speeds

The new study has found the business appetite for high-capacity connectivity is set to support the next surge of digital investment. 42% of UK businesses regard moving to higher capacity connectivity in the next two years as key to growth plans — rating it either ‘integral’ or ‘greatly important’ to their future success.

As well as showing an appetite for greater connectivity, the report insights point to shortcomings in government incentives for high-capacity network expansion, stifling the ability of AltNets to serve UK business growth. When business leaders were asked if their business had felt a notable impact from the government’s Project Gigabit rollout, just 52.5% said yes.

The UK Business Gigabit Connectivity Report – conducted by business ethernet backhaul providers Neos Networks – gathered insights from business leaders and decision-makers at 160 UK companies. The study sought to gauge the business appetite for connectivity investment to support growth and identify the role AltNets could play.

For those that have invested over the last 24 months, nearly one in eight businesses (11.2%) stated that investing in connectivity had a direct impact on business profitability. Plus, 98.3% of businesses said they saw indirect impacts such as productivity, staff retention or client collaboration.

Some of the top reasons businesses are prioritising higher capacity connectivity are increased computer power (22.4%), operational development meaning more data and higher capacity requirements (21.2%), and greater device usage for each employee (11.6%). One in 10 UK businesses are actively looking to increase their connectivity to better integrate AI into their processes.

Currently, 1 in 5 businesses state they’re receiving ‘insufficient’ internet speeds for everyday operations. Over half (55.6%) of UK companies have risked losing a client or customer as a consequence of poor internet connectivity, speed or reliability.

The research also revealed a gap between the broadband experience of rural and urban businesses. Urban and rural-based companies have both prioritised connectivity investment in future growth plans. Nearly twice as many urban businesses as rural ones wanted better connectivity to give them a competitive advantage. While rural businesses identified connectivity investment over the next two years as a key part of “levelling up”.

Simon Willmott, Director of Wholesale Business Development at Neos Networks, says: “The business appetite for high-capacity connectivity is clear, and this provides a great opportunity for AltNet providers. As businesses strive to keep pace with technology, companies in underserved rural and competitive urban areas will naturally require greater network capacity.

“While the UK government has backed network investment with Project Gigabit, they must now go further in making connectivity expansion commercially viable – with grant incentives, access rights and wayleaves. Supporting AltNets to unlock the next stage of network expansion in this way can only be positive for UK business, and solidify the UK’s position as world leaders in the digital economy.”

Jeremy Chelot, CEO of Netomnia, says: “The digital-first approach of many UK businesses is increasing the demand, but a full fibre network can cope with it for many years to come. Netomnia’s strategy to support rural deployment is to extend our network out from urban centres to surrounding rural areas. The risk is too great to do it any other way. Financial savvy and long-term stability among network providers are the most important things to maintain a high level of competition to support rural areas.”

Tom Brook, Head of IT at Broadband for Surrey Hills (B4SH): “The presence of any AltNet for a rural business is instantly going to improve their internet speeds and increase productivity. And where multiple full fibre services exist in an area, AltNets can provide higher upload speeds in comparison to the major national provider.

“AltNets have an excellent opportunity to provide services far sooner and in better consultation with those in the hardest-to-reach locations. AltNets may also be able to provide the next generation of speeds earlier than the national telecoms provider. We already see some providers offering 2.5, 3 and 10 gigabit services across their network, where the national provider is only just starting trials.”

Read the report here https://neosnetworks.com/resources/blog/uk-business-gigabit-connectivity-report/



Company info: Neos Networks