04 October 2024

Maybe, maybe not - but as always, there’s room for improvement...

Despite the widespread availability of gigabit connectivity, London’s small and medium-sized businesses (SMEs) continue to struggle with slow and unreliable broadband, leaving many at a disadvantage in productivity, innovation and competitiveness.

New analysis from G.Network shows that SMEs are missing out on an estimated £28 billion in annual revenue due to slow and unreliable broadband. The annual lost output is estimated at £5.34 billion Gross Value Added (GVA). 25% of senior leaders and business owners of London SMEs admit that problems with slow or unreliable broadband have caused them to lose business; and 47% identified employee connectivity in the workplace as an area undermined by poor connectivity.

“Digital connectivity is at the heart of London’s economy, but despite extensive availability, the SMEs we’ve spoken to recently are still suffering because connections are too costly and complicated,” reports Kevin Murphy, CEO of G.Network. “Poor connectivity has pushed more than half of senior leaders and business owners of London SMEs to consider moving office location to get better access to faster and more reliable workplace internet, while four in 10 state they can’t serve clients in the way they’d like due to problems with slow or unreliable office internet.”

With this latest study direct from the nation’s capital – and arguably, the best connected city the implications for UK-wide connectivity are stark…

Need for speed

With an average business broadband speed of just 73.21Mbps in the UK, there are significant implications for businesses.

Sectors like technology, media, and finance require higher speeds to handle large data transfers, video conferencing, and real-time analytics; 73.21Mbps is likely insufficient. As highlighted by G.Network, slow broadband speeds can impact productivity, especially if businesses rely on cloud services, video conferencing, or real-time data processing. Further, for businesses with online customer interactions or e-commerce operations, slow speeds can lead to poor user experiences and customer churn.

Rick Mur, CTO at GNX, however, reports that “much higher speeds are typically available in any part of the UK; it may involve installing fibre optic cabling which introduces a one-time cost, but after that the connectivity options are limitless. We also recommend businesses to not use typical broadband or even business broadband circuits as they come with minimal to no SLAs and are based on the same network as consumer internet - which is highly oversubscribed, meaning no guarantees on bandwidth. Dedicated Internet Access (DIA) circuits are a much better option for any business.”

“Although the UK’s average broadband speed stands at 73.21Mbps, it’s important to look at the progress that has been made in recent years,” opines Sam Hales, Business Development Director (B2B), MS3 Networks. “According to Ofcom data, the nation’s average upload speeds increased 73% between March 2022 and March 2023. During the same period, the gap in download speeds between urban and rural areas dropped from 58% to 26%, enabling more rural businesses to enjoy the benefits of ultrafast connectivity. Much of this progress can be attributed to the success of the UK’s full fibre rollout.”

According to Uswitch data, around 61% of UK premises now have access to full fibre, with the government aiming to make it available nationwide by 2030. However, Hales adds that some businesses are still in danger of being left behind: “currently, just over half of UK SMEs can access full fibre. Even when full fibre is available, uptake of the service is often low, standing at 28% of all UK premises where it is available.”

Picking the right package

For a business to succeed in this digital era, having the right broadband can be make or break. When evaluating the most important features of a broadband package, it’s crucial to consider the specific needs and priorities of the business.

“Before signing up for a business broadband package, it’s important to consider how many employees use the internet simultaneously, what they use it for and the potential impact of any loss of service,” suggests Hales. “The number of staff using the internet can help you decide the internet speeds you will need. You should also consider the types of activities employees carry out. For example, if you frequently make video calls, it’s better to opt for a synchronous network. This means that upload and download speeds are the same, which is essential for tasks that require the upload of large amounts of data.”

“We look at multiple factors to identify the right solution for a customer,” agrees Mur. “How many users make use of the link at the same time? What profile of users does the company have (team calls, video editing, graphic designers, etc.)? Where are most of the resources hosted: in a private data centre, inside a public cloud or SaaS applications? Urgency of installation? SLA requirements? Growth trajectory of the location?” The answers to all these questions help outline the needs of each specific enterprise.

Reliability is, of course, crucial for any business to avoid disrupted business operations, lost productivity, and revenue impacts.

“Considering the potential impact of network failures on your business can guide you,” says Hales. “Full fibre broadband that connects fibre cables straight to your premises is much more reliable than older services relying on copper wires, such as fibre to the cabinet (FTTC). Even so, if extended time without access to the internet would cause huge issues for your company, a business plan offering round-the-clock customer service, and a minimum service guarantee would be best.”

Quality of Service (QoS), too, is key, enabling the prioritisation of certain types of traffic over others, and ensuring that critical applications receive the necessary bandwidth and performance; this is particularly important for businesses that use applications requiring real-time data or those with high demands on network performance.

Bandwidth and speed also have a huge impact on the success of a broadband network. Adequate bandwidth supports multiple users and devices, ensures smooth operation of cloud applications, and handles large file transfers, while faster speeds contribute to quicker download and upload times, and better performance for web-based applications. Moreover, with business success comes growth – the network must be scalable to support expansion.

Mur highlights that “latency is an often overlooked but absolute key requirement that has to be taken into consideration when deciding on a new internet connectivity solution. You can have a link with a huge amount of bandwidth, but when your destination is on the other side of the world, latency can cause transfers to be a lot slower than expected. Latency is caused by many different elements on the internet. Distance being the key factor, but a poorly designed network also contributes.”

With cyber-attacks on a seemingly endless rising trajectory, security features like firewalls, anti-virus protection, and DDoS mitigation built into the business broadband package is becoming more common.

“It’s essential that ISPs put the necessary measures in place to protect businesses from cyber risks. Although most employees know the dangers of choosing weak passwords or clicking links from unrecognised senders, the increasing volume and sophistication of cyber-attacks can leave businesses vulnerable.

According to 2024 UK Government data, half of businesses have experienced a cyber security breach or attack in the last twelve months, with large and medium-sized businesses most at risk,” opines Hales. “Many ISPs already offer security services such as firewalls and threat detection, but as the number of cyber-attacks continues to surge, we’re likely to see business ISPs widen their security offering further.”

Indeed, as cyber-threats become more sophisticated and widespread, many businesses now view security as a fundamental aspect of their internet service. But will security ever come as standard in business broadband services?

“For business usage: no. Security should be a part of the whole IT infrastructure of an enterprise network,” opines Mur. “The internet provider (on a single location) should not be involved, and a third-party SD-WAN/SASE solution is a much more preferable solution. Transparency is key for business broadband or any type of internet connectivity for businesses.”

Avoiding the pitfalls

Selecting a new business broadband provider is no easy feat; organisations should be aware of several potential pitfalls to ensure they make an informed decision.

“There are a number of elements that make it hard to compare apples to apples like different terminology used by various providers, and non-transparent models with companies buying from other companies where it is unclear who will deliver the actual service,” explains Mur. “Looking for an honest, transparent partner that understands the business and technical requirements is key.”

Inadequate bandwidth is a common challenge, with some providers overpromising on speeds, which it turns out aren’t consistently achievable due to network congestion or infrastructure limitations. Business should thus check if the speeds are for peak times or average performance; these can be verified with customer reviews or a trial.

Hidden costs and fees are another concern. It’s vital that the enterprise understands all terms and conditions, including early termination fees or penalties, and be clear about any extra charges for exceeding bandwidth limits or for services like static IP addresses or additional support.

Indeed, “failing to read the terms and conditions of your broadband plan can end up costing you in the long run,” warns Hales. “Although business broadband packages are usually advertised with a single monthly cost, ISPs could increase their prices in line with inflation every April. This means that if you enter a 24-month contract, you could potentially face two price increases in that time. Ofcom has cracked down on this practise and will require ISPs to state these intended price increases in pounds and pence from 17 January 2025. However, with many providers applying a flat rate rise to all contracts, this change will disproportionately affect businesses on low-cost plans, which will see the biggest increases as a percentage of what they pay.”

Preparing for the future

To future-proof business operations with a broadband package, it’s important to consider factors that will support growth, evolving technology needs, and operational resilience.

With bandwidth demands increasing near-daily, many industry experts suggest opting for full fibre – even if the business need is not yet there. Fibre offers the highest speeds and reliability, which is crucial for handling increasing data demands, supporting high-definition video conferencing, and using cloud-based applications; and is generally more future-proof compared to DSL or cable.

“For small businesses, or those that don’t rely heavily on the internet to undertake their daily activities, it can be tempting to stick with an older form of internet such as FTTC or an advanced digital subscriber line (ADSL) service. However, even for companies that don’t need the high speeds of full fibre, opting for this form of connectivity helps to future-proof operations,” advises Hales.

As well as prioritising today’s demands – reliability, QoS, bandwidth, etc. – IT teams should plan for advanced technologies such as IoT, 5G, AI and ML which are becoming increasingly integral to business operations.

In 2024, future-proofing business broadband must naturally include considerations for hybrid working, which has placed further pressure on broadband speeds and bandwidth.

“With ONS data showing that around a quarter of UK employees worked on a hybrid model between 22 May and 2 June 2024, we’re seeing many ISPs tailor their services to this adapted way of working,” reports Hales. “Providers offering home office or hybrid worker plans highlight the benefits of business broadband, such as enhanced security, ideal for home workers who need to access confidential or highly sensitive data.”

“We’ve seen the impact in that demand for internet-based connectivity options is rapidly growing for businesses,” adds Mur. “Companies are moving away from traditional private connectivity options (like MPLS) as more applications are hosted and accessed from outside the customer premises.”

To meet growing demand, there has been increased investment in broadband infrastructure, including the expansion of fibre-optic networks and improvements in 5G coverage. While urban areas are seeing faster improvements, rural areas still lag – raising questions about the longer-term viability of remote working from rural regions…