Study reveals a great opportunity for alternative network providers (AltNets) to meet growing demand for gigabit broadband despite lack of government incentives
A new study has found the business appetite for high-capacity connectivity is set to support the next surge of digital investment. 42% of UK businesses regard moving to higher capacity connectivity in the next two years as key to growth plans — rating it either ‘integral’ or ‘greatly important’ to their future success.
The UK Business Gigabit Connectivity Report – conducted by business ethernet backhaul providers Neos Networks – gathered insights from business leaders and decision-makers at 160 UK companies. The study sought to gauge the business appetite for connectivity investment to support growth, and identify the role AltNets could play.
For those that have invested over the last 24 months, nearly one in eight businesses (11.2%) stated that investing in connectivity had a direct impact on business profitability. Plus, 98.3% of businesses said they saw indirect impacts such as productivity, staff retention or client collaboration.
Some of the top reasons businesses are prioritising higher capacity connectivity are increased computer power (22.4%), operational development meaning more data and higher capacity requirements (21.2%), and greater device usage for each employee (11.6%). One in 10 UK businesses are actively looking to increase their connectivity to better integrate AI into their processes.
Government can do more, say business leaders
As well as showing an appetite for greater connectivity, the report insights point to shortcomings in government incentives for high-capacity network expansion, stifling the ability of AltNets to serve UK business growth. When business leaders were asked if their business had felt a notable impact from the government’s Project Gigabit rollout, just 52.5% said yes.
Currently, 1 in 5 businesses state they’re receiving ‘insufficient’ internet speeds for everyday operations. Over half (55.6%) of UK companies have risked losing a client or customer as a consequence of poor internet connectivity, speed or reliability.
“The business appetite for high-capacity connectivity is clear, and this provides a great opportunity for AltNet providers,” Simon Willmott, Director of Wholesale Business Development at Neos Networks, said. “As businesses strive to keep pace with technology, companies in underserved rural and competitive urban areas will naturally require greater network capacity.
“While the UK government has backed network investment with Project Gigabit, they must now go further in making connectivity expansion commercially viable – with grant incentives, access rights and wayleaves. Supporting AltNets to unlock the next stage of network expansion in this way can only be positive for UK business, and solidify the UK’s position as world leaders in the digital economy.”
Jeremy Chelot, CEO of Netomnia, added that the digital-first approach of many UK businesses is increasing the demand, but a full fibre network can cope with it for many years to come. “Netomnia’s strategy to support rural deployment is to extend our network out from urban centres to surrounding rural areas,” he added. “The risk is too great to do it any other way. Financial savvy and long-term stability among network providers are the most important things to maintain a high level of competition to support rural areas.”