Over the weekend I saw an interesting programme on TV about the levels of Broadband adoption amongst small businesses.  This programme focussed on one particular country where small companies felt their business was suffering due to inadequate high speed internet connections and a communications infrastructure that, in places, was heavily dependant on a network of telephone poles to connect remote regions of the country.  In fact the programme even compared the telecommunications infrastructure to one found in some third world countries. 

Now this particular country’s communications infrastructure is not as unreliable as those in some emerging markets such as India, as depicted in the image below, but the telecommunications infrastructure in the country highlighted in the programme is very outdated and leading experts estimated that it would cost £15Billion to provide a new fibre optic based communications network in this country.

This particular country does tend to suffer from one or two significant storms each year and internet users in remote locations have to hold their breath to see if their internet connection is still live after the storms have passed.  The main telecommunications provider for this country claims to have 98% coverage of the country. However the actual speed of the connection varies considerably and in many cases companies are having to relocate to major towns or cities in order to improve the speed of their internet connection and more importantly the speed of how these companies can respond to customer orders or queries. 

So where is this country I hear you ask, well it is the UK!

According to a recent article in Business Week, Northern European countries have one of the highest broadband penetrations in the World. For example, Denmark, Finland, Sweden and the Netherlands all saw broadband penetration rates over 30% at the end of 2007.  The UK, Belgium, Luxembourg and France are hot on the heels of the top four and these have penetration rates above those of the U.S or Japan.  The global Boradband penetration is shown below with leading broadband adoption countries shown in dark green.

According to a recent press release from Forrester, they estimate that the top four North European countries today will see penetration levels increase to 85% by 2013. In the UK, the broadband market is dominated by BT and due to the EU imposing new regulations on the telco providers, they are having to open up their networks to other companies wishing to provide Broadband connections.  There are two key factors limiting the speed of the UK broadband network, firstly the copper wires used for the point to point connection and secondly the distance from the telephone exchange.  At the moment you can only get a reliable broadband connection in the UK if you are within a 5 mile radius of a telephone exchange. 

Now in the rural parts of the UK many smaller businesses are starting to suffer due to the fact that their businesses are more than five miles from a telephone exchange.  This is a major concern to smaller UK businesses in rural areas who can see the benefits of being able to conduct business across the internet but they are limited to using the much slower dial up connections.  In a broadband speed experiment conducted on the TV programme, it took nearly 40 minutes to download a video from the BBC website, this business was just over 5 miles from his nearest telephone exchange.  Meanwhile a colleague of his who was about 1 mile from the exchange was able to sit in her garden and wirelessly review the video in real time.  So a simple example, but for other companies or indeed the growing home working community in the UK, the infrastructure needs to be significantly improved. 

Now the mobile network operators have spotted a gap in the market and they can now provide USB based wireless modem connections however again the mobile phone coverage across the UK, especially in rural areas is not very fast.  However for other people these USB based broadband connections will change the way in which people work, provider greater freedom and less reliance on having a fixed line broadband connection.

Another example given on the programme was of a computer animation company who were working on a new series for Disney.  In order to get a better quality of life the owners of the company decided to relocate their design studios to Truro in the South West of the UK.  They have now found that their business is being hindered by the slow internet connections available in this part of the UK.  They are currently having to send completed episodes of their animations on DVD to another office in London,  by courier, so that they can then be uploaded to a server and then sent across the pond to Disney Studios. 

So the adoption of eCommerce amongst smaller companies is in part being hindered by poor or unreliable internet connection speeds here in the UK and the only way this can be improved is by continued investment in the communications infrastructure.  BT are currently investing millions in the development of their new 21C communications infrastructure , lets hope they do not forget the thousands of smaller businesses located in rural parts of the UK and their desire to be connected to what will become one of the world’s leading IT infrastructures when it is completed.