Now that Mr. Hammond’s first (and last) Autumn Statement has been revealed, SMEs and independent ventures around the UK have a clearer picture of the British economy, the state of the SME and an outlook to the future—and in times exacerbated by uncertainties surrounding the result of the EU referendum – a glimmer of hope was lit in the form of a new plan to transform Britain’s ageing broadband infrastructure.
For British businesses, connectivity and entrepreneurship are intrinsically linked, with some of Britain’s greatest ventures making a name for themselves through the use of cutting-edge technology to disrupt the status quo. Underpinning the wealth of innovation in this area is the networking that connects us to each other. Today, people demand and expect rich, next-generation experiences—whether that’s consuming content, keeping in touch with loved ones, or streamlining their everyday life.
Many of Britain’s businesses completely rely on the web and internet-based touchpoints to reach their customers—and as a result of the ever deeper, more visual and more interactive experiences that the internet encourages, customers need a wider degree of bandwidth to sustain it.
Whilst access to fibre connectivity has grown in recent years through the influence of Openreach and a number of other infrastructural plans, it isn’t keeping pace with the acceleration of innovation that society is experiencing. Ofcom urging BT to separate from network division over competition fears, is another indication of the desire to accelerate in the creation of an advanced backbone across the UK.
The bulk of today’s fibre customers in the UK are still wired up to their local connection point over copper—a slow, outdated technology that chokes home and business connections and dilutes the great speed and bandwidth enabled through fibre-optic technology. This model, is incompatible with uploading and sharing large quantities of content, a daily need as we see real-time collaboration and transfer of information thanks to cloud solutions.
Improvements to customer experience
Mr. Hammond hopes to change that, however. As a result of his declared ambitions to make the UK a world leader in 5G and fibre connectivity, his Autumn Statement highlighted a new £400m full-fibre fund aiming to kick start the next-generation of British business.
The announcement of this new fund, in line with an overall £1bn investment in fibre broadband, should bolster the UK’s position on the world stage when it comes to connectivity. For British businesses, whether you’re a florist or the latest new tech startup, that should create clear results. A boost to your and your customers’ broadband speeds mean you can provide an ever greater customer experience online, reach them in new ways (on mobile for instance) and respond more quickly and potentially at lower cost. Furthermore, with increased reach to rural areas thus far slow to receive faster broadband, the investment will help enable new businesses to benefit from an online shopfront and allow existing ones to operate from new areas. Where you may currently run your small or medium sized online business from London for the speed of connectivity, rural broadband can enable you to run that same business from Devon at a fraction of the cost in office space and business rates while losing none of the benefit.
In order to help expedite this process, Mr. Hammond added something of a sweetener to his announcement—a complete and total cut of business rates levied on companies laying fibre in communities across the country. For more remote and rural areas, where populations are often lower, the overall return on investment for infrastructure providers is typically reduced as a result of the initial development outlay.
These rural and remote communities are, historically, often harder for infrastructure to reach, often having a knock-off effect on the ability for businesses in these areas to compete with those based in urban centres. Whilst Mr. Hammond’s full-fibre broadband fund is undoubtedly a welcome step in achieving a greater rollout of fast, reliable, and affordable connectivity, the government must take steps to help ensure its utilisation for investment in solutions that can expand connectivity and reach to those that often lose out— not simply enhance the often abundant level of connectivity available to many centres for large businesses.
Similarly, whilst the UK admittedly has one of the widest reaches for overall broadband connectivity, it is incredibly cost prohibitive on a global level. According to the OECD, British broadband is currently 13th globally for cost per megabit of advertised speed, behind Italy, Mexico, and the United States, to name a few. As important as reach and bandwidth are, it cannot be too expensive for smaller businesses and independent ventures to adopt.
So what can Mr. Hammond’s first Autumn Statement—and an apparent renewed focus on connectivity and reach—mean for SMEs moving forward? If the government can deliver on its plan, we could see a more competitive, sustainable, and affordable trading environment for SMEs and entrepreneurs across the country, and possibly attracting the latest and greatest innovators and disruptors in the world. Networks, both cellular and cabled, could reach extreme speeds with low latency overheads, helping to enable the next-generation of online content-consumption experiences, creativity, and innovation—and ultimately, Britain could hit Mr. Hammond’s ambitions to become a global leader in connectivity and a centre of innovation for the future.
Stefano Maruzzi, VP EMEA, GoDaddy
Image source: Shutterstock/Ekaphon maneechot