Investing in Broadband



BT is investing £2.5bn to roll-out superfast broadband to two-thirds of UK consumer and business premises by the end of 2014.

Regeneris Consulting was commissioned to assess the potential economic benefits of BT's investment in superfast broadband for businesses and focussed on four case study areas:

  • A rural area in the UK: Norfolk and Suffolk
  • A UK town: Caerphilly
  • A UK city: Sunderland
  • The capital city: London

The report and its observations builds on Regeneris' experience in the production of number of studies assessing the economic impact of broadband investments throughout the UK. Their work has informed business planning and bid development, including a number of the current crop of BDUK projects and projects to help secure investment from European funding sources.

The 'Key Facts regarding BT's investment in Broadband' and the 'Summary of key observations' from the report are below.

Download the full report

Regeneris Consulting is an independent economics firm that provides research-based advice to major corporates, developers, national government bodies and local government. We regularly assess the economic impact of broadband investments in a number of locations across the UK. This work has informed business planning and bid development, including for a number of the current crop of BDUK projects and projects to help secure investment from European funding sources. See: www.regeneris.co.uk for further information.


Key Facts regarding BT's investment in Broadband
  • BT is laying more than 50,000km of fibre, enabling over 1,000 exchange areas and installing c30,000 street cabinets
  • More than 7m premises already have access to superfast broadband and BT is expecting to reach 10m premises by the end of 2012 and two thirds of UK premises by the end of 2014
  • BT continues to roll out ADSL2+ 'up to 20Mbps broadband across the UK. During Spring 2013, 90% of all UK homes and businesses will have access to this service
  • Ethernet (the most widely installed local area network technology) continues to grow too. BT has the largest Ethernet footprint in the UK with 1,080 nodes deployed so far
  • There are now more than 3.5 million BT Wi-Fi hotspots in the UK and these continue to rise
  • In March 2012 the speeds of BTs FTTC (fibre to the cabinet) service were roughly doubled to deliver up to 80Mbps download (with upstream speeds at up to 20Mbps). Fibre to the premises (FTTP) will offer speeds of up to 300Mbps download
  • Following successful BT trials of 'FTTP on demand, speeds of up to 300Mbps could be available anywhere in BTs fibre footprint where customers want it from Spring 2013. This is particularly good news for small businesses
  • BT has ambitions to roll out fibre broadband beyond its commercial plans to cover two thirds of UK premises. A public private partnership approach is required to deliver this
  • BT has a strong track record of delivering fibre broadband in partnership with the public sector through programmes in Cornwall & the Isles of Scilly and Northern Ireland, with more expected
  • BT is looking to find alternative solutions to reach those people in the most remote parts of the UK. They are currently trialling a variety of different broadband technologies such as white spaces on the Isle of Bute and 4G and satellite in Cornwall

You can find out more about Next Generation Broadband in the UK and the difference it is making at www.bt.com/ngb.
 

Key observations from Regeneris
For any one location such as a rural area, town or city it is expected that superfast broadband could create between £143 million and £19.8 billion in additional GVA. This equates to an annual increase in GVA of between 0.3% and 0.5%. The focus is on the business impacts which result from superfast broadband, which arise from a combination of improved business performance; business creation as a result of Cloud Computing and enhanced home working opportunities.

For a typical rural area (or set of rural counties) superfast broadband could lead to:
  • An annual increase in GVA of 0.3% per annum over 15 years. For every £1 a business invests in superfast broadband, this will create nearly £15 in additional GVA for the UK economy
  • 1,470 business start-ups as a result of Cloud Computing and support for 7,780 home workers
  • Around 1,810 jobs created through business creation and improved business performance

For a typical UK town superfast broadband could lead to:
  • An annual increase in GVA of 0.5% per annum over 15 years. For every £1 a business invests in superfast broadband, this will create nearly £16 in additional GVA for the UK economy
  • 140 business start-ups as a result of Cloud Computing and support for 1,030 home workers
  • Around 225 jobs created through business creation and improved business performance

For a typical UK city superfast broadband could lead to:
  • An annual increase in GVA of 0.4% per annum over 15 years. For every £1 a business invests in superfast broadband, this will create nearly £14 in additional GVA for the UK economy
  • 320 business start-ups as a result of Cloud Computing and support for 1,580 home workers
  • Around 436 jobs created through business creation and improved business performance

For the UK's capital city superfast broadband could lead to:
  • An annual increase in GVA of 0.5% per annum over 15 years. For every £1 a business invests in superfast broadband, this will create nearly £10 in additional GVA for the UK economy
  • 6,600 business start-ups as a result of Cloud Computing and support for 73,000 home workers
  • Around 26,200 jobs created through business creation and improved business performance
 

The economic benefits which are expected to result from investment in superfast broadband is in line with the UK Government's ambition to create economic growth and improve Britain's position in the world economy, as set out in 'The Plan for Growth' (HM Treasury and BIS, March 2011). The document sets out the UK Government's plans to make the UK one of the best places in Europe to start, finance and grow a business. It recognises that support for the UK digital infrastructure and particularly superfast broadband is central to this aspiration.