When Tech City UK was launched by David Cameron in Shoreditch in 2010, its aim was to create the ‘optimum conditions for digital technology businesses and entrepreneurs to thrive across the UK’. Their focus was on the growth of digital businesses in London and other major cities across the country.
Since its launch, Tech City has been a huge success and has seen technology firms in London alone grow from 250 to 5,000 in the space of just six years. Yet digital experts have identified a huge problem that is holding London back from becoming one of the digital capitals of the world: the speed of London’s broadband.
London Lags Behind
London has yet to reach the top ten cities in the world for its average broadband speed.
The latest ‘State of the Internet’ report by Akamai which includes data from Q3 of 2015, places the UK at ninth in the EMEA region. The UK manages 13.0 Mbps as an average and 54.2 as a peak connection speed. Countries including Norway, Switzerland, the Netherlands, Finland, Czech Republic, Denmark and Romania all boast faster speeds in both categories and it is Sweden that tops the list with a superior average of 17.4Mbps and a peak Mbps of 69.0.
This is a humiliating result for London’s broadband and it certainly poses some problems for the future of our digital sector. We have previously talked about the digital skills gap and how companies have never faced stronger competition in attracting the best technology talent to their digital roles.
Digital talent is attracted to forward-thinking innovative companies that have super-fast and hi-tech systems. A lagging broadband speed will slow down the growth of digital teams and companies across the capital.
Outdated Copper Wire Infrastructure
Why is London’s broadband so slow in comparison to other countries when Britons regularly generate more money online than any other G20 country?
The poor connectivity is a problem which lies in our outdated copper wire infrastructure. Many of our companies, and homes, are being provided with broadband via a mixture of copper and fibre. Fibre is delivered to cabinets in the streets and then copper carries the signal the remainder of the way into the property. This significantly limits the average speed in comparison to all-fibre networks. This compromise of a broadband delivery system means that it is simply not adequate for the growth potential of the digital sector.
Boris Ivanovic, who is the Chairman of Hyperoptic comments,
"If the UK wants to maintain its digital leadership there must be a fundamental shift in its urban broadband strategy. The government must incentivise the private sector to fast track the implementation of future-proofed Fibre-to-the-Building and Fibre-to-the Home infrastructure across all UK cities and towns".
The Economy Committee has challenged the future Mayor to highlight the requirements for London to become a leading digital economy. Businesses in the capital need access to ultrafast 100Mbps download and upload speeds provided by a high-speed broadband infrastructure. The Economy Committee also requests that the Mayor lobbies the government to introduce super-fast connections as one of the conditions for planning consent in new developments.
Is Super-Fast Broadband Too Expensive?
Some critics of the average broadband speed tests claim that the findings are deceiving as they display the speeds that consumers and SMEs have chosen to use rather than those that they have access to. Put simply, London’s broadband is not necessarily the issue. Instead the blame lies with London businesses who are choosing not to pay for the fastest type of broadband as it is too expensive, even though better speeds are available as an option. Consumers are being charged four times as much for super-fast broadband in London as they are in Bucharest, Romania. If this is the case, then London businesses need to consider their IT budgets with care and realise that they are causing their own digital stagnation by not investing in the best broadband services that are available.
It is thought that value to the UK businesses who further develop their digital presence is worth as much as £90 billion. As a collective, London businesses, the Mayor and the Government all need to work together to invest in our digital future and achieve that target. If we do not, then the best digital talent and global technology firms will choose another capital city to invest in, which will widen our digital skills gap even further and leave us behind .