Snail's pace web speeds stifling small firms' growth
- 29 April 2014
- From the section Business
High-speed internet - or the lack of it - has become a global economic issue.
A 10% increase in fast broadband penetration can result in between 0.25% and 1.38% growth in a country's gross domestic product (GDP), research by the International Telecommunications Union (ITU) suggests, as well as a 3.6% increase in efficiency.
Yet even some developed economies are struggling to provide widespread high-speed connectivity across all areas.
For example, poor broadband coverage in many parts of the UK is leaving small businesses hamstrung, constraining their export potential, and hampering economic growth, says the Federation of Small Businesses (FSB).
Andrew Charteris, project manager of Buckinghamshire-based Hamble Interiors, an interior design company employing three people, told the BBC: "It is frustrating when you can't upload and view a drawing during a meeting. Our international clients are frankly baffled - they can't believe it."
He often needs to send architectural plans to clients in the Middle East, but the internet connection is just not fast or reliable enough to run his business properly, he maintains. The speed drops significantly in the afternoons when children come home from school and start playing and working online, he says.
His business is based in the village of Hambleden, where a company called Village Networks provides a radio-based broadband service using masts connected to villagers' roofs.
The masts beam the radio signal from house to house and provide a standard broadband service of up to 6 megabits per second (Mbps) to local businesses.
But this, and other options, such as 3G or 4G cellular services and satellite broadband, can be expensive, slow, patchy and unreliable.
And it's not just rural areas, which telecoms providers say are more expensive and difficult to service, that are suffering from high-speed internet "notspots" or "slowspots".
"People can't work from home because it takes too long to access files on our server," says Mick Stallwood, managing director of Design and Automation Solutions, an engineering design consultancy based less than 35 miles from London.
Slow broadband speeds well below 2Mbps are preventing him from taking on more staff working from home, and from opening another office in Australia, he says.
The company works with large computer aided design, or CAD, files which are often 50 megabytes (MB) or larger in size.
So what is the UK government doing about it?
Its national Broadband Delivery UK scheme aims to provide universal access to broadband services of up to 2Mbps by 2017.
But Mike Cherry, the FSB's policy chairman, believes that this level of service is wholly inadequate.
"The idea that 2Mbps by 2017 is sufficient for businesses is not the greatest of thinking by the government - it is nowhere near enough," he says.
"Without broadband you won't get the same levels of growth, and efficiency inevitably suffers."
Earlier this month, Ofcom, the UK communications regulator, announced that the average download speeds for residential fixed-line broadband connections rose by 21% to 17.8Mbps between May and November 2013, prompting communications minister Ed Vaizey to say that "the UK has the best superfast coverage of all five leading European economies."
But access to such speeds is far from evenly spread, particularly for businesses, and Britain still lags behind many other countries.
According to the latest State of the Internet report carried out by global web content network provider Akamai, Britain ranks sixth in the EMEA - Europe, Middle East and Africa - region (11th worldwide) for fast broadband availability above 10Mbps, and eighth in EMEA (14th worldwide) for average speed broadband availability of above 4Mbps.
"If we want to go for the high levels of exports that the government is encouraging, then we need to be leaders in broadband provision," says Mr Cherry.
"But we are streets behind countries like Singapore and South Korea. Just being middle of the road is not good enough."
Mawingu white spaces
So how do other countries cope?
In places like the Netherlands or Singapore that have dense urban populations it is much cheaper to provide fast broadband coverage for everyone than in less developed countries with more geographically widespread rural populations.
But a number of innovative approaches are being developed to bring fast broadband to people in some of these countries.
For example, Microsoft's 4Afrika Mawingu initiative is exploring the use of unused television broadcast bands - known as TV white spaces - to transmit internet signals to rural communities in Kenya as an alternative to 3G mobile internet.
Frank McCosker, general manager for affordable access at Microsoft 4Afrika, says the technology has a range of 13km (eight miles) from a transmitter base station; can offer broadband connections of up to 16Mbps and costs 15% of the equivalent 3G infrastructure.
"We are trying to connect the unconnected and make it affordable," he explains.
4Afrika is installing low energy base stations in health centres and schools offering free internet access, and these are powered by solar panels, which also provide charging facilities for mobile phones and other internet devices.
Agents are also using the technology to set up internet cafes in old shipping containers equipped with masts and solar panels in Kenya's Rift Valley. These are mainly used by local farmers to access weather forecasts, learn new growing techniques, and get the latest prices for seeds and crops, Mr McCosker adds.
Companies including Facebook and Google are also investigating the possibility of providing wireless broadband internet connections via solar-powered drones.
Earlier this year, Facebook bought UK-based drone maker Ascenta for $20m (£12m). And this month Google bought US high-altitude drone maker Titan Aerospace for an undisclosed sum.
Titan's drones can fly for years using solar power, and the company says it expects initial commercial operations by 2015.
So as the rest of the world plays catch up, many British small firms are still crawling along in the internet slow lane.