The first lines of Matt Hancock’s speech to Broadband World Forum last week weren’t shy in setting out the general theme. Hancock’s previous speeches had shown that more than most, he ‘gets’ the role that technology can, does and may play in all of our lives. So did his predecessor Ed Vaisey. But what marked this speech out was an unapologetic focus on fibre; as he described it, the future.
A recent study (h/t Computer Weekly) on the economic impact of London’s superfast broadband connection voucher scheme shows that it could bring a £3bn boost to London SMEs within two years. Carried out by Adriot Economics, and supported by Point Topic, The Fifth Sector and Manchester University, the evidence comes from around 500 of the 12,000 London businesses who benefited from the scheme.
The SME Connection scheme was launched in late 2013 as part of the Super Connected Cities scheme. Despite some initial teething problems it quickly picked up speed, benefiting from an advertising push and a streamlined application process that included the ability to aggregate vouchers. When it closed in October 2015 55,000 vouchers – a one-off grant of up to £3000 – had been issued to SMEs in over 50 cities with over 700 suppliers taking part.
This report is the first to attempt to undertake an economic analysis of the scheme – something which the BSG called for in our Small Business Connectivity Requirements Report last year. London’s scheme allocated £18m over the two years with an average cost of £1,500. This resulted in an average speed increase from 15.9 Mbit/s to 86.6 Mbit/s. The range of services delivered can be seen in the graph:
In the short to medium term this resulted in increased efficiency and sales. It also resulted in productivity gains from staff time savings and increased ability for home and mobile workers. The report also identified longer term gains in terms of using this time to increase skills – and having better access to online courses.
On a conservative basis this should provide a boost of £3bn in the first two years and an additional £4bn over five years if the latent productivity gains are realised. In terms of Gross Value Added, the economic benefit is estimated to be £430m for Greater London and an additional 8,118 jobs. That’s an extremely impressive £23 GVA per £1 invested and a cost per job of £2,200.
The report doesn’t cover additional economic benefits such as those delivered to the suppliers, nor the extent to which it stimulated the market to deliver superfast broadband services (in fairness a non-trivial task).
Whilst the report was just focused on London and, by the author’s admission, survey results are still coming in – it does seem to beg the question of should Government have stopped the scheme when it did?
In fairness, Ed Vaizey made clear to the CMS Select Committee’s Inquiry into World-Class Connectivity he wanted the scheme to carry on – he was just unable to get the Treasury to agree. That’s not to say the scheme was perfect – whilst it was born out of the Super Connected Cities Programme, SMEs in rural areas would arguably benefit even more from such a scheme. But it was still a scheme that seems to be delivering economic benefits, popular amongst SMEs and broadly welcomed by the telecoms industry. With loud noises of industrial strategy and regions pushing the message that they are open for business, don’t be surprised if we see this revived in some form…
Urban Connectivity: The Demand and the Challenges
12 October 2016 10.00-17.00
techUK, 10 St Bride St, London, EC4A 4AD
The UK’s cities are determining factors in our economic well-being, helping to drive growth and create jobs. By their nature they require resilient, high capacity and high quality infrastructure. This applies to digital communication networks as much as it does to transport infrastructure. Indeed, it may shortly matter more.
The Digital Economy Bill was announced in the Queens Speech today, intended to “make the UK a world leader in digital provision – a place where technology ceaselessly transforms the economy, society and government”. For the telecoms sector it aims to make it easier to deploy communications infrastructure whilst empowering consumers.
The European Commission today announced that they were blocking the proposed takeover of O2 by Hutchinson (Three’s parent company) due to the strong concerns that it has over the impact that this merger would have on competition in the UK market.
Following the recent (and ongoing) Government consultation on the approach to take to introduce a Broadband Universal Service Obligation (USO), Ofcom is now consulting on its design and implementation. Ofcom was commissioned by Government to produce an evidence-based report by the end of this year which will address thorny issues from the scope of the USO to its funding mechanism.
Government has today launched its consultation on a Universal Service Obligation for broadband. The consultation acknowledges that a USO is a safety net for those who do not have access to super or ultrafast speed to ensure that everyone is able to participate in our digital society. This follows on the Prime Minister’s commitment last year that the UK would have a USO of 10 Mbit/s. This level is backed up by Ofcom in their latest Connected Nations Report.
The Government’s much trumpeted* £150m Mobile Infrastructure Project (MIP) will close later this month. It has only succeeded in deploying around 60 mobile masts in mobile not-spots at a total cost of under £10m. For those living or commuting through those areas, then the new mobile coverage from all four operators is no doubt eagerly received. But given the project was originally scheduled to deliver between 550-600 sites, there is no doubt it has fallen short of its original goals.
Earlier this month, a survey by the Manufacturer’s Association (EEF) found that internet connectivity was increasingly central to manufacturer’s operations and that Britain’s success in leading the fourth industrial revolution relied on improvements to affordability and internet infrastructure. In a keynote speech at the EEF annual conference today, Business Secretary Sajid Javid announced the review of business broadband “to reduce the barriers to affordable, high-quality fibre-broadband”.
The Broadband Stakeholder Group (BSG) were very pleased to support NextGen2015 latest annual event Costs Down, Value Up: Reviewing Connectivity Infrastructure Investment in the UK that took place last week.
Our Chairman, Richard Hooper, joined an extensive list of speakers including Anna Krzyżanowska – Head of the Broadband Unit at DG CONNECT, Edgar Aker – President FTTH Council Europe, Barney Lane -Director of Regulatory Affairs – Colt Technology Services and Mike Locke – Managing Director Satellite Internet. Richard’s speech, Is the UK on track to meet its digital needs, is replicated in full below.
Getting as many people online and enjoying the benefits of that the internet can bring is an incredibly complex task involving digital skills, attitude and awareness among others. But in many ways the first step is ensuring that the underlying connectivity is available to them. In this light the Government’s desire to “make sure that every home and business can have access to fast broadband by the end of this Parliament” is to be welcomed.
Every year the Broadband Commission for Digital Development, a body set up by the ITU and UNESCO in 2010, sets out its annual report on the state of the global broadband industry. The headline from this year’s was that outside of some pockets such as mobile broadband, overall growth in internet take-up and usage is slowing; a concern when by the end of this year just 43.4% of the global population will be online.