The UK faces a Digital Productivity abyss. Accelerating FTTP is the only answer.
Though the UK ranks as the world’s 5th largest economy, we are laggards in terms of global broadband Internet performance.
The UK languishes in 26th position for average fixed-line broadband speeds – as measured by the speedtest.net website – sitting behind 13 of our nearest and most influential economic neighbours. Our lowly position is perhaps understandable in that the UK has for most of the 20th century been a communications leader and an early adopter of the latest and (briefly) greatest technologies available; an approach that left an inevitable trail of legacy technologies that have only recently been consolidated by BT in favour of the emergent ubiquitous and scalable standard of Ethernet.
But whilst the UK has in recent times had its head in the sand and focussed on squeezing every Megabit from an existing copper infrastructure, our digital and economic rivals who, with a smaller legacy base, have seized the initiative and are talking an order of magnitude higher – about a Gigabit capable infrastructure, future proofed through fibre-optic infrastructure.
The consequence is concerning with two forces acting against each other to drive a digital productivity gap: Cloud technology continues to march on, and the UK continues to lose ground in the capability of its digital infrastructure to connect its businesses to these Cloud services.
For all those early-stage Entrepreneurs through to the SME community for whom the current Full Fibre Leased Line solution is a financial step too far, there is an increasing pressure on their competitiveness with their ability to seize new opportunities to innovate being thwarted by slower access to the emerging Internet, Digital and Cloud technologies that drive productivity and innovation in an increasingly digital, and fast paced world.
Yet in this new world, where new thinking can change the old world overnight, failing to address this infrastructure productivity gap presents an unquestionable a threat to the long-term competitiveness and productivity of UK plc.
It is perhaps telling that in 2008 the OECD convened to discuss the ‘Future of the Internet Economy,’ in South Korea; and that ten years later South Korea along with its highly digitised regional neighbours Hong Kong and Singapore fill the top spots in the broadband speed world rankings, each with average Internet speeds above 130 Mbps.
National infrastructure sits at the heart of the issue, with only 2% of UK premises having readily available access to Full Fibre Internet Services. These Full Fibre, or Fibre to the Premises (FTTP) services require fibre optic cable to be installed directly into the premises, whereas the UK broadband infrastructure is built predominately upon BT and Virgin copper. The marketing departments that have for a long time pushed ‘fibre broadband’ into common parlance for such services are rather stretching the truth in that nearly all ‘fibre broadband’ services are delivered over copper, and in the long-run this copper cannot sustain the broadband speeds demanded by todays digital economy.
If our SME’s, who represent the backbone of the UK economy are not feeling it today, the crunch is coming.
Cisco forecast that Internet utilisation per capita will increase 20% year-on-year up to 2020. In business, the growth is likely to be greater; with more knowledge-worker staff, using more Cloud applications, there will be an inevitable crunch on the bandwidth available over the typical SME business broadband connection before long.
The accelerated build and adoption of Full Fibre internet circuits that support Gigabit Internet services is now critical to allow the UK to maintain it’s competitiveness and drive long-term economic growth and job-creation in our data, knowledge and services driven economy.
The Government’s Gigabit Voucher Scheme – offering SME organisations a straightforward grant of up to £3,000 towards the costs of upgrading to Full Fibre Gigabit Internet – is a welcome development and coincides well with improvements in the Openreach delivery model to promote the adoption of ultrafast Internet for business. The grant subsidises businesses looking to adopt true Full Fibre and FTTP technologies and is a step change from the mainstream ‘fibre broadband’ services that are available (over copper) to most today.
The Gigabit Voucher Grant is currently a £2m trial across only four areas of the country (though one of those is the Syscomm heartland in Coventry and Warwickshire), it is with some urgency that we hope the Government recognise the emerging digital productivity gap, and will quickly extend the scheme nationally to emulate the success of a similar superfast broadband Connectivity Voucher scheme that ran up to March 2016 and through which Syscomm and other registered suppliers were able to introduce fibre optic connectivity into the business community, with transformational effects.
In conversations with our Customers who benefitted from the previous Connectivity Voucher scheme, there has been a great deal of appreciation for how the subsidy helped lower the barriers to superfast business Internet adoption to a point where the costs became palatable for an SME. Having done so most now cite how Full Fibre based connectivity has proved to be so much more reliable, giving our Customers both the confidence and ultrafast bandwidth to harness the media-rich collaboration, Video, Telephony, Cloud and Backup services that our foreign competitors are so readily able to enjoy.
The current Gigabit Voucher Scheme offers up to £3,000 funding for eligible SME businesses in Coventry and Warwickshire, Leeds, Bradford, Bristol and Aberdeen counties upgrading to a minimum 100 Mbps throughput on a Gigabit capable Internet circuit; but with only £2m of trial funding available, only a tiny fraction of companies will have the benefit of this. With the UK already facing uncertain times surrounding our international relationships, we would encourage Local Councils, the SME community and our MP’s to lobby the Department of Digital, Culture, Media and Sport to extend the Gigabit Voucher scheme far and wide and to make it as easy as possible for up-and-coming Small Businesses to benefit from ultrafast Full Fibre / FTTP Internet, so that the digital productivity gap can be closed before our economic neighbours disappear over the digital horizon.