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February 8, 2016updated 04 Sep 2016 10:27pm

EEF calls on UK Gov’t to intervene as companies slam expensive business broadband

News: Survey reveals that insufficient connectivity could stifle technological advance.

By Alexander Sword

British companies are dissatisfied with the UK’s existing broadband infrastructure and argue it could hold the country back from future growth.

According to a survey by EEF, the manufacturer lobbying group, around two thirds of companies say that connectivity is not adequate to meet future growth demands, while 50 percent say that costs of accessing internet services have risen over the past two years.

It also revealed that a quarter of small firms and half of medium-sized firms were paying over £5000 a year for internet access.

These figures were despite a high degree of importance being assigned to the internet, with two thirds saying that they plan to increase investment in equipment and services that are reliant on fast broadband.

In addition, over 90 percent of respondents said that a high-speed internet connection was "as essential to business as electricity and water"; it is expected to be vital to the ‘fourth industrial revolution’.

On the back of the research the EEF urged the UK Government to work to drive down costs in the market, possibly through a review of competition in the business broadband market.

"While the quality of networks isn’t currently an issue, companies are paying inflated sums to have proper access and are fearful they will not have competitive access five years down the line," said Lee Hopley, EEF chief economist.

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Internet connectivity is required to support the roll out of the industrial Internet of Things, in which sensors will communicate with each other to feed data back into production lines.

Rob Bamforth, Principal Analyst at Quocirca, noted that companies paying over five thousand for their connectivity is a lot, but said that there are other factors in buying broadband apart from cost.

"If connectivity is critical then reliability is critical," he said. "It becomes more than a cost decision: you must think about speed, reliability and latency."

"With business broadband, if it is a higher quality service that might mean you pay more. Quality constitutes things like the bi-directional performance: are the upload and download speeds similar? A lot of businesses want symmetric service."

Bamforth agreed with the EEF claim that more focus was needed on the business market.

"There has been an overly high focus on the consumer and a bigger focus on business broadband is welcome."

He added however that there were some key steps businesses themselves could take to ensure they purchased the right services.

"It is important that people look at what they need and what they are buying. They should monitor what is going on.

"They should look at the primary applications, be honest about what’s being used and what’s expected to be used in the future.

"If an organisation is building unified communications to bring contracts down to a more manageable level, it might expect more video will start to be used, so there will be more traffic."

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