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August 22, 2014

“Ludicrous” broadband issues costing London businesses millions

Internet speeds ‘not fit for use’.

By Vinod

London’s businesses are being severely handicapped by sub-standard broadband connections in the city, reportedly costing both them and the capital millions every year.

Data from the Centre for Economics and Business Research (CEBR) found that small and medium-sized enterprises (SMEs) based in the City of London endure an average broadband download speeds of just 11.9MBps, far behind the 20.5MBps average for Greater London as a whole.

Overall, just 6% of businesses in the area, which is home to 45% of the UK’s SMEs have access to a superfast broadband connection.
The poor state of these connections mean that SMEs are losing £7.8m a year in lost productivity – equivalent to a total of 50,400 days per year supervising and arranging broadband installation.

In addition to this, the survey found that SMEs are wasting millions on having an unneccsary landline connections installed, with over two thirds of businesses believing that they could operate effectively without one.

This means that as many as 240,000 SMEs are being unnecessarily subject to a ‘landline tax’, costing them up to £37m per year.

"The fact that a landline is required for most broadband services despite falling call volumes indicates that many consumers are getting poor value for money from their monthly landline rental," said Colm Sheehy, a senior economist at CEBR.

The survey was commissioned by new broadband supplier Relish, which is aiming to supply low cost "plug and play" connection services to customers in central London without the need for a landline.

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Nicholas James, CEO of UK Broadband, the company behind Relish, said: "London is home to some of the world’s most talented and busy people, who have to suffer delays in getting their broadband service set up and pay a ‘landline tax’ for a service they often don’t need."

 

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