Infrastructure for Business

Transcription

1 Infrastructure for Business The IoD Member Broadband Survey

2 Infrastructure for Business 2013 #5

3 The IoD Member Broadband Survey The IoD Member Broadband Survey Written by: Corin Tayor, Senior Economic Adviser at the IoD. January

4 Infrastructure for Business 2013 #5 Contents EXECUTIVE SUMMARY 5 CONTEXT 7 THE IoD MEMBER BROADBAND SURVEY 8 CONCLUSIONS 18 4

5 The IoD Member Broadband Survey Executive summary In October 2012, the IoD carried out a survey of 1,147 IoD members to gather their views on fixed-ine and mobie internet services for their business. The experiences of the two thirds of respondents with a primary workpace ocated in an urban area and the one third with a primary workpace ocated in a rura area were given particuar attention. 1 The key findings of the survey incude: Fixed-ine broadband speeds Overa, 57% of IoD members are satisfied with fixed-ine downoad speeds for their business, and 50% with fixed-ine upoad speeds. By contrast, just 34% of members with a primary workpace in a rura area are satisfied with the speed of their fixed-ine service for downoads, whie 51% are dissatisfied. Ony 29% of rura members are satisfied with upoad speeds, compared to 58% dissatisfied. Mobie internet services Overa, just 25% of IoD members are satisfied with mobie downoad speeds, compared to 45% dissatisfied. In rura areas, just 13% are satisfied with mobie downoad speeds, compared with 60% dissatisfied. Ony 21% of rura members are satisfied with the reiabiity of their mobie internet services, compared with 46% dissatisfied. Benefits of higher internet speeds Significanty higher fixed-ine and mobie internet speeds woud: Improve the productivity of 83% of IoD members; Improve the overa competitiveness of 65%; Encourage 56% to offer more fexibe working opportunities to staff; Encourage 31% to invest more in their business; Encourage 13% to hire more staff. The ast three years sighty faster Overa, 17% think that fixed-ine downoads are now significanty faster than three years ago, whie 41% say that they are sighty faster. By comparison, just 7% think they have got sighty sower and ony 3% significanty sower. Overa, 12% think that mobie downoads have got significanty faster over the ast three years and 33% think they have got sighty faster. By contrast, 7% think that mobie downoad speeds have faen sighty and 3% think they have faen significanty. 1 The IoD surveyed 1,147 IoD members between 11 and 21 October 2012 using the IoD s Poicy Voice pane, a community of IoD members who participate in monthy surveys on pubic poicy issues. 746 members (65%) sef-defined their primary workpace as being in an urban ocation, and 396 (35%) sef-defined their primary workpace as being in a rura ocation. 5

6 Infrastructure for Business 2013 #5 In rura areas, just 8% think that mobie downoad speeds have improved significanty over the ast three years, but 25% think they have improved sighty. More than four in ten (43%) think that mobie downoad speeds have remained the same over the ast three years. Just 8% think they have worsened sighty and 4% say they have worsened significanty. The next three years significanty faster Overa, 39% think that fixed-ine downoads wi get significanty faster over the next three years, and 41% think they wi get sighty faster. Just 2% think they wi sow. Overa, 45% think that mobie downoads wi get significanty faster, 33% sighty faster and just 2% sower. Openreach Overa, 32% of IoD members who have deat with Openreach (the company that ooks after the wires connecting homes and businesses to the oca teephone exchange) were satisfied with the service, compared to 42% dissatisfied and 26% neither satisfied nor dissatisfied. Ony 23% of rura members who have deat with Openreach were satisfied with the service, compared to 46% dissatisfied. 6

7 The IoD Member Broadband Survey Context This report presents the views and experiences of 1,147 IoD members across the UK on their business internet services. The context for this report is fourfod. First, internet use is growing exponentiay: According to a recent report by Cisco, goba internet traffic wi increase from around 370 exabytes (biion gigabytes) in 2011 to over 1,320 exabytes in 2016, a compound average growth rate of 29% a year. Within that tota, mobie data is expected to account for an increasing share, with a compound average growth rate of 78% a year. 2 Second, the UK is in the midde of the pack on broadband speeds: According to a report by Akamai, a coud provider that anayses the 2 triion daiy requests for web content it receives, the UK ranks: 18th in the word on average connection speeds; 19th in the word on the fastest connection speeds; 21st in the word on the percentage of connections above 10 Mbps; 16th in the word on the percentage of connections above 4 Mbps. 3 Third, the current ro-out of superfast broadband to urban areas is to be wecomed. But the rura broadband programme risks acking in ambition, funding and urgency: The House of Lords Communications Committee recenty criticised the Government s broadband strategy for faiing to create a future-proof nationa network, concuding that the current programme risks eaving peope and businesses in certain areas of the UK behind. 4 A recent report by Poicy Exchange argued that the 2Mbps-by-2015 universa service commitment may soon prove to be inadequate, recommending that to maintain a baseine eve of connectivity consistent with rising expectations and internet use in the genera popuation, the government shoud deveop and begin tracking a universa service commitment cast in reative rather than absoute terms. 5 Fourth, improved fixed-ine and mobie internet infrastructure woud provide important productivity benefits to businesses and coud assist with the wider aims of rebaancing growth across the UK and encouraging exports. In this context, and to hep provide further evidence to the debate, the IoD asked businesses across the UK about their experiences on the ground. 2 Cisco, Cisco Visua Networking Index: Forecast and Methodoogy , May 2012 Tabe Akamai, The State of the Internet, 2nd Quarter 2012, Section House of Lords Seect Committee on Communications, Broadband for a an aternative vision, Juy Chris Yiu and Sarah Fink, The Superfast and the Furious: Priorities for the future of UK broadband poicy, Poicy Exchange, January 2013, pp

8 Infrastructure for Business 2013 #5 The IoD member broadband survey In October 2012, the IoD carried out a survey of 1,147 IoD members to gather their views on fixed-ine and mobie internet services for their business. The experiences of the two thirds of respondents with a primary workpace ocated in an urban area and the one third with a primary workpace ocated in a rura area were given particuar attention. 6 Four topics were examined: Satisfaction with the existing state of internet services; The ikey benefits of faster internet speeds; How internet speeds have changed over the ast three years and are expected to change over the next three years; Views on Openreach, the company that instas and maintains the cabes and wires that run from homes and businesses to the oca exchange. SATISFACTION WITH INTERNET SERVICES There are two key spits with regard to satisfaction with internet services. Firsty, IoD members overa tend to be satisfied with fixed-ine broadband speeds for their business but dissatisfied with mobie internet speeds. Secondy, IoD members with rura businesses tend to be dissatisfied with fixed-ine broadband speeds as we as with mobie internet services more generay. Fixed-ine broadband services Speed Overa, IoD members are generay satisfied with fixed-ine downoad and upoad speeds for their business: Overa, 57% of IoD members are satisfied with the speed of their fixed-ine broadband service for downoads, compared to 29% dissatisfied. For upoads, 50% are satisfied compared with 34% dissatisfied. Urban and rura members, however, report very different experiences: Just 34% of members with a primary workpace in a rura area are satisfied with the speed of their fixed-ine service for downoads, whie 51% are dissatisfied. Ony 29% of rura members are satisfied with upoad speeds, compared to 58% dissatisfied. Members with a primary workpace ocated in an urban area are more upbeat, with 69% satisfied with downoad speeds, compared to just 17% dissatisfied. 8 6 The IoD surveyed 1,147 IoD members between 11 and 21 October 2012 using the IoD s Poicy Voice pane, a community of IoD members who participate in monthy surveys on pubic poicy issues. 746 members (65%) sef-defined their primary workpace as being in an urban ocation, and 396 (35%) sef-defined their primary workpace as being in a rura ocation.

9 The IoD Member Broadband Survey Simiary, 61% of urban members are satisfied with upoad speeds, compared to 20% dissatisfied. CHART 1 IoD member satisfaction with fixed-ine downoad speeds 55% 50% 45% 40% 35% 30% Ony 34% of rura IoD members are satisfied with fixed-ine downoad speeds for their business, whie 51% are dissatisfied. 25% 20% 15% 10% 5% 0% Very satisfied Satisfied Neither satisfied nor dissatisfied Dissatisfied Very dissatisfied Overa Urban Rura CHART 2 IoD member satisfaction with fixed-ine upoad speeds 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Very satisfied Satisfied Neither satisfied nor dissatisfied Dissatisfied Very dissatisfied Overa Urban Rura 9

10 Infrastructure for Business 2013 #5 Reiabiity Simiary, most IoD members are satisfied with the reiabiity of their fixed-ine broadband service, but rura members are ess ikey to be satisfied: Overa, 66% of IoD members are satisfied with the reiabiity of their workpace fixedine broadband service, compared to 21% dissatisfied. Urban members are generay content with the reiabiity of their service, with 73% satisfied and 14% dissatisfied. Overa, just 25% of IoD members are satisfied with mobie downoad speeds. Rura members are aso happy with reiabiity, but ess so 49% are satisfied and 35% dissatisfied. Price Views on the price of broadband services are mixed: Overa, 39% of IoD members are satisfied with the price of the fixed-ine broadband service for their business, with 25% dissatisfied and 31% neither satisfied nor dissatisfied. Rura members are more ikey to be unhappy, with 29% satisfied, 32% dissatisfied and 36% neither satisfied nor dissatisfied. Urban members are more content, with 44% satisfied and 20% dissatisfied. Mobie internet services Speed In contrast to fixed-ine broadband services, IoD members in a areas tend to be unhappy with mobie internet speeds, with rura members particuary downbeat: Overa, just 25% of IoD members are satisfied with mobie downoad speeds, compared to 45% dissatisfied. Simiary, just 20% are satisfied with mobie upoad speeds, compared to 48% dissatisfied. Rura members are particuary unhappy. Just 13% are satisfied with mobie downoad speeds and 11% with mobie upoad speeds. By contrast, 60% are dissatisfied with mobie downoad speeds and 59% with mobie upoad speeds. Urban members aso tend to be unimpressed. Less than a third (31%) are satisfied with mobie downoad speeds, compared with 37% dissatisfied. Ony a quarter (25%) are happy with mobie upoad speeds, compared with 42% unhappy. CHART 3 IoD member satisfaction with mobie downoad speeds 35% 30% 25% 20% 15% 10% 5% 0% Very satisfied Satisfied Neither satisfied nor dissatisfied Dissatisfied Very dissatisfied Overa Urban Rura 10

11 The IoD Member Broadband Survey Reiabiity IoD members ocated in urban areas tend to be satisfied with the reiabiity of their mobie internet service, in contrast to those ocated in rura areas: Overa, 32% of IoD members are satisfied with the reiabiity of their mobie internet service, compared to 35% dissatisfied. Just 21% of rura members are satisfied, compared with 46% dissatisfied. Urban members are more upbeat, with 38% satisfied with the reiabiity of their mobie internet service and 28% dissatisfied. CHART 4 IoD member satisfaction with reiabiity of mobie internet 35% 30% 25% 20% 15% 10% 5% 0% Very satisfied Satisfied Neither satisfied nor dissatisfied Dissatisfied Very dissatisfied Overa Urban Rura Price A simiar picture can be seen on price, with rura members tending to be unhappy: Overa, 26% of IoD members are satisfied with the price of their mobie internet service, compared to 30% dissatisfied. Ony 19% of rura members are satisfied with the price of their mobie internet service, compared to 35% dissatisfied. Among urban members, 29% are satisfied and 26% dissatisfied. BENEFITS OF SIGNIFICANTLY FASTER INTERNET SPEEDS IoD members, especiay those in rura areas, think that significanty faster fixed-ine and mobie internet speeds woud bring a range of benefits. Overa: 83% say that significanty faster fixed-ine and mobie internet services woud improve the productivity of their business; 65% think that faster speeds woud improve the overa competitiveness of their business; 79% aready offer fexibe working very often or quite often, and 56% say that higher speeds woud encourage them to offer more fexibe working opportunities to staff; 11

12 Infrastructure for Business 2013 #5 31% say that higher speeds woud encourage them to invest more in their business; 13% think that faster internet services woud encourage their business to hire more staff. TABLE 1 How faster fixed-ine and mobie internet speeds woud benefit IoD members Strongy agree Tend to agree Faster internet speeds woud improve the productivity of 83% of IoD members businesses. It woud improve our organisation's productivity It woud increase the overa competitiveness of our organisation It woud encourage our organisation to offer more fexibe working opportunities to staff It woud encourage us to invest more in our organisation It woud encourage our organisation to hire more staff 39% 24% 23% 6% 3% 44% 41% 33% 25% 10% Members with a primary workpace in a rura area woud benefit particuary. Faster speeds woud: Improve the productivity of 88%; Improve the overa competitiveness of 75%; Encourage 60% to offer more fexibe working opportunities to staff; Encourage 37% to invest more in their business; Encourage 15% to hire more staff. Urban members woud aso benefit. Faster speeds woud: Improve the productivity of 80%; Improve the overa competitiveness of 61%; Encourage 54% to offer more fexibe working opportunities to staff; Encourage 28% to invest more in their business; Encourage 12% to hire more staff. TRENDS OVER TIME The UK is in the midde of a ro-out of superfast fibre broadband to cities and towns, and a more imited programme of improvements to the internet services received in ess popuated areas. Later this year, 4G mobie services from a major providers (i.e. in addition to EE) are set to be roed-out across the country, foowing the 4G spectrum auction. IoD members, incuding those in rura areas, are generay upbeat about downoad and upoad speed improvements over the ast three years, and very positive about the next three years. Fixed-ine broadband services Last three years IoD members tend to agree that fixed-ine downoad speeds have improved over the ast three years: 12

13 The IoD Member Broadband Survey Overa, 17% think that fixed-ine downoads are now significanty faster than three years ago, whie 41% say that they are sighty faster. By comparison, just 7% think they have got sighty sower and ony 3% significanty sower. Among rura members, 12% say that downoad speeds are significanty faster and 39% sighty faster, compared with 11% who think they are sighty sower and 5% significanty sower. Among urban members, 19% say that downoad speeds have risen significanty and 43% say they have risen sighty, compared to just 6% who think they have faen sighty and 2% saying they have faen significanty. CHART 5 IoD member views on how fixed-ine downoad speeds have changed over the ast three years 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Significanty faster Sighty faster Neither faster nor sower Sighty sower Significanty sower Overa Urban Rura Fixed-ine upoad speeds are aso considered to have improved over the ast three years: Overa, 15% say that fixed-ine upoads are significanty faster than three years ago, and 37% think they are sighty faster. Ony 8% think that upoad speeds have faen sighty, and just 3% say they have faen significanty. Rura members aso tend to agree, with 11% thinking upoad speeds are significanty faster and 33% sighty faster, compared to 11% saying that upoad speeds are sighty sower and 5% significanty sower. Urban members are the most upbeat, with 18% thinking fixed-ine upoads have got significanty faster, 40% sighty faster, just 7% sighty sower and ony 2% significanty sower. Next three years Over the next three years, IoD members beieve that fixed-ine downoad speeds wi improve: Overa, 39% think that downoads wi get significanty faster, and 41% think they wi get sighty faster. Just 2% think they wi sow. In rura areas, 37% think that downoad speeds wi improve significanty and 32% say that they wi improve sighty. Ony 4% think they wi get worse. In urban areas, 41% think they wi improve significanty and 46% say they wi improve sighty, with just 1% thinking that downoad speeds wi fa. 13

14 Infrastructure for Business 2013 #5 CHART 6 IoD member views on how fixed-ine downoad speeds wi change over the next three years 50% 45% 40% 35% 30% Fixed-ine and mobie internet speeds are expected to increase significanty over the next three years. 25% 20% 15% 10% 5% 0% Significanty faster Sighty faster Neither faster nor sower Sighty sower Significanty sower Overa Urban Rura A simiar picture can be seen for upoad speeds over the next three years: Overa, 39% of IoD members say that upoad speeds wi improve significanty and 40% think that they wi improve sighty. By contrast, just 2% think that upoad speeds wi fa. In rura areas, 36% think that fixed-ine upoad speeds wi increase significanty and 31% say they wi increase sighty. Ony 4% think they wi fa. In urban areas, 41% say upoad speeds wi increase significant and 45% say they wi increase sighty, with just 1% thinking they wi fa. Mobie internet services Last three years IoD members are positive about mobie downoad speed improvements over the ast three years, but ess so than for fixed-ine: Overa, 12% think that mobie internet downoads have got significanty faster and 33% think they have got sighty faster. By contrast, 7% think that mobie downoad speeds have faen sighty and 3% think they have faen significanty. In rura areas, just 8% think that mobie downoad speeds have improved significanty over the ast three years, but 25% think they have improved sighty. More than four in ten (43%) think that mobie downoad speeds have remained the same over the ast three years. Just 8% think they have worsened sighty and 4% say they have worsened significanty. In urban areas, IoD members are more positive, with 15% saying that mobie downoad speeds have risen significanty and 37% saying they have risen sighty. By contrast, ony 7% think they have faen sighty and 3% say they have faen significanty. 14

15 The IoD Member Broadband Survey CHART 7 IoD member views on how mobie downoad speeds have changed over the ast three years 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Significanty faster Sighty faster Neither faster nor sower Sighty sower Significanty sower Overa Urban Rura A simiar picture can be seen for mobie upoad speeds over the ast three years: Overa, 10% think that mobie upoad speeds have risen significanty, 29% think they have risen sighty, 7% say they have faen sighty and 4% think they have faen significanty. In rura areas, just 6% think that mobie upoads have got significanty faster, with 22% saying they have got sighty faster. The argest proportion (45%) think that mobie upoad speeds have stayed the same. Ony 7%, though, think that mobie upoad speeds have faen sighty and 6% say they have faen significanty. Amongst urban members, mobie upoad speeds are thought to have risen significanty by 12%, risen sighty by 33%, faen sighty by 7% and faen significanty by 3%. Next three years Over the next three years, IoD members beieve that mobie downoad speeds wi rise: Overa, 45% think that mobie downoads wi get significanty faster, 33% sighty faster and just 2% sower. In rura areas, 38% think they wi get significanty faster, 29% sighty faster, and just 3% sower. In urban areas, the proportions are 49% significanty faster, 36% sighty faster and just 1% sower. 15

16 Infrastructure for Business 2013 #5 CHART 8 IoD member views on how mobie downoad speeds wi change over the next three years 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Significanty faster Sighty faster Neither faster nor sower Sighty sower Significanty sower Overa Urban Rura IoD members are simiary enthusiastic about the prospects for mobie upoad speeds over the next three years: Overa, 44% say that mobie upoad speeds wi rise significanty, 33% say they wi speed up sighty and just 2% think they wi sow down. In rura areas, the proportions are 38% significanty faster, 29% sighty faster and 3% sower. In urban areas the proportions are 47% significanty faster, 35% sighty faster and 1% sower. 16

17 The IoD Member Broadband Survey OPENREACH Openreach, part of BT Group, was created in January 2006 to ook after the wires that connect homes and businesses to the oca teephone exchange. It was formed after an agreement was reached between BT and Ofcom to ensure that other operators woud have access to BT s oca network. Connecting businesses to teephone and broadband services swifty, and repairing fauts rapidy, are vita services. Just over haf of IoD members have deat with Openreach, but unfortunatey satisfaction, particuary in rura areas, is ow: Overa, 52% of IoD members have had deaings with Openreach. For members with a primary workpace in a rura area, the proportion is 64%, and for those with a primary workpace in an urban area, the proportion is 46%. Overa, 32% of IoD members who have had deaings with Openreach were satisfied with the service, compared to 42% dissatisfied and 26% neither satisfied nor dissatisfied. Ony 23% of rura members who have deat with Openreach were satisfied with the service, compared to 46% dissatisfied. Opinion was more eveny baanced amongst urban members. Of those who have deat with Openreach, 39% were satisfied and 39% dissatisfied. CHART 9 IoD member satisfaction with service provided by Openreach (those who have deat with Openreach ony) 35% 30% 25% 20% 15% 10% 5% 0% Very satisfied Satisfied Neither satisfied nor dissatisfied Dissatisfied Very dissatisfied Overa Urban Rura 17

18 Infrastructure for Business 2013 #5 Concusions Five key concusions can be drawn from the survey of IoD members: First, fixed-ine broadband for businesses in urban areas is generay good and is expected to improve over the next few years. The current ro-out of superfast broadband to the UK s towns and cities is very wecome. Ensuring fast upoad, as we as downoad, speeds is essentia. Second, fixed-ine broadband for businesses in rura areas is generay unsatisfactory, and has ony improved sighty in the ast few years, athough is expected to improve in the next few years. Faster broadband in rura areas is an urgent priority. Third, mobie internet services are far from satisfactory. Ensuring that the 4G ro-out covers as much of the country as possibe, incuding rura areas, and that prices are affordabe, is aso crucia. Fourth, IoD members are generay dissatisfied with the service provided by Openreach, which instas and maintains vita phone and internet connections from premises to the oca exchange. This is worrying given the importance of connectivity to business. Openreach must improve the service it offers. Fifth, significanty faster fixed-ine and mobie internet speeds woud bring significant benefits to IoD members businesses and to the wider economy. 18

19 The IoD Member Broadband Survey About the Infrastructure for Business series The UK s infrastructure was once the best in the word. Great innovators ike Brune and Stephenson were pioneers of the raiway, which revoutionised the way peope and goods moved around the country. Faster, better and cheaper infrastructure heped fue the rapid growth of the industria revoution, giving businesses the patform they needed to thrive at home and export to the word. In the ast century, Britain continued to deveop new forms of trave, eading the way in aviation and buiding an extensive motorway system. The UK sti benefits from its infrastructure inheritance, and parts of our network function reativey we. But we have ost our ead, as we try to squeeze too many onto too itte. Our roads are congested, many of our trains are standing room ony, and panes are forced to circe in stacks before getting a anding sot at our main airport. High taxes on driving and fying, and big rai fare increases, have made getting around more expensive. And there are risks to the security of our energy suppy, as repacements for our ageing coa and nucear power stations are not buit quicky enough and environmenta reguations and taxes, which shoud be better focused on reducing emissions in the cheapest way, push up the cost of powering the country. Infrastructure for Business is a new series of papers ooking at the key energy, transport and technoogy infrastructure deveopments that woud hep the UK regain competitiveness and encourage a thriving private sector. We need to put Britain back in the ead again to hep our firms compete in the word. For more information, pease emai corin.tayor@iod.com

20 Infrastructure for Business Infrastructure for Business is a series of papers by the IoD ooking at the key energy, transport and technoogy infrastructure deveopments that woud hep the UK regain competitiveness and encourage a thriving private sector.