Your company's internet speed might be fantastic if you're located in the heart of London, Leeds, or Liverpool - but what about if you're out in the sticks? Rural businesses need good internet too, but a new report from the Federation of Small Businesses (FSB) says that they're less likely to get it. What's more, that poor connectivity is costing the UK economy billions.
The FSB report, The Growth Belt: Supporting Rural Small Businesses, looked at a range of issues facing companies in areas with less than 10,000 residents. The report, which also explored energy costs and transport issues, warned that rural businesses face reliability and speed issues with their broadband, which is making it difficult for them to grow effectively in a digital age.
Rural areas account for 85% of the land mass in England and accommodate almost one in five of its people. The government has committed to improving connectivity in these areas, but the FSB report suggests that there's still work to be done.
A full third of companies in rural regions have internet reliability issues, said the report. Poor speeds made it more difficult for 14% of them to contact customers, with one in ten reporting a loss of sales and reduced competitiveness due to connectivity issues. All these numbers are approximately double those reported by companies in urban areas. At least one respondent quoted in the report cites broadband issues as a possible reason for relocation.
OFCOM has warned that the pandemic has exacerbated the connectivity problem, because so many more businesses now support hybrid working. The competition gap is also rising, as almost four in five small-to medium businesses in the UK are planning to upgrade or add new digital services, it added.
So, the FSB says that it's time to take action. It wants the government to update the Universal Service Obligation (USO) minimum requirements for upload and download speeds from its current threshold of 1Mbit/sec and 10Mbit/sec to 3Mbit/sec and 25Mbit/sec. It also wants the cap on monthly broadband prices reduced from £46 to £35 per month. The government should reserve some of the money allocated to its nationwide roll-out of Gigabit internet - known as Project Gigabit - for rural areas, it adds. However, the government has acknowledged that some locations are simply too remote for Project Gigabit to reach.
Improving your connectivity
In the meantime, what options do small businesses have? One common tactic is to have a mobile data connection as a backup. The UK's four main mobile companies operate the Shared Rural Network, an effort to expand 4G coverage to 95% of the UK by 2025. Mobile coverage is still by no means perfect in rural areas, but it can give smaller businesses a useful backup.
Rural businesses heavily dependent on connectivity that just can't get the service they need from terrestrial or wireless have a higher-cost alternative: satellite coverage. Elon Musk's Starlink satellite internet service has been available in the UK since 2021, and offers high upload and download speeds. However, you'll need to buy the equipment to use it, along with a monthly subscription fee. Residential options are more expensive than terrestrial broadband, while, the equipment for business accounts costs upwards of £2,000 with a monthly subscription of around £150. That will be cost-prohibitive for many businesses.
While rural users scrabble for options, the government insists that it's working on the problem. April saw it launch its Wireless Internet Strategy. That includes an £8m commitment to reaching all premises in the UK, including those the 35,000 most difficult to reach. The government will draw on satellite services for this coverage, and has a significant stake in satellite company OneWeb.
These days, patchy broadband isn't just an inconvenience; it's a potential show stopper. If your point of sale system goes down, your business suffers instantly. Let's hope that the government delivers on its promises to flood the countryside with connectivity. As competition increases, it will be an existential issue for many businesses.