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16 January 2015

New research finds rural firms still in the digital slow lane

Reference number: FSB PR 03/2015

New research from the Federation of Small Businesses has found half (49%) of rural small businesses in Cheshire are dissatisfied with the quality of their broadband provision. The data showed nearly double the level of dissatisfaction compared to their urban based counterparts (28%).

This issue is predicted to become even more significant over the next two years, as small firms become more reliant on a high quality broadband connection to do business. More than three quarters of small firms (77%) said e-mail will be critical to their business, while more than half (57%) said broadband will be essential to engaging with their customers in the next two years.

The FSB research uncovered rural Cheshire businesses'' dissatisfaction across a number of areas, including reliability (47% dissatisfied), upload speed (61% dissatisfied) and download speed (61% dissatisfied). This represents nearly a 50% gap in reported satisfaction levels with comparable urban businesses.

Simon Edmondson, FSB Regional Chairman for Manchester & North Cheshire, said: "This research paints a worrying picture of a divided business broadband landscape, and if left unaddressed highlights a clear obstacle to growth in the coming years. We risk seeing the emergence of a two-speed online economy here in Cheshire, resulting from poor rural broadband infrastructure.

"It''s easy to see rural Cheshire being bypassed ahead of nearby economic powerhouses such as Greater Manchester and Warrington when it comes to broadband investment. There''s a real risk large conurbations like these will act as a pull, and this would likely deter entrepreneurs from starting up in rural locations."

He added: "Our research is particularly worrying as many as 14 per cent of small firms still view the lack of a reliable broadband connection as being the primary barrier to their growth. A reliable connection is now viewed as a key business requirement by 94 per cent of small UK businesses, yet continued poor connectivity in rural areas represents a huge missed opportunity for economic growth."

As a result of the findings laid out in its ‘Fourth Utility'' report, the FSB is calling for Government to conduct a comprehensive review of broadband policy. This includes measures to encourage more competition for better packages in the business broadband market, a commitment to accelerate the roll-out of 4G mobile services and prioritisation of fibre-optic provision to business parks and enterprise zones.

Edmondson also said the FSB would be lobbying the next government to commit to a minimum of 10 Mbps to all business premises by 2018/19, and secure a pledge to deliver minimum speeds of 100Mbps to all by 2030.