Intense competition in the smartphone market, particularly in China thanks to Apple’s iPhone 6, has led to Korean tech giant Samsung reporting an 11pc fall in revenues and a 27pc fall in profits for the fourth quarter.
Dublin: 29.01.2015 04.20PM
While head in the sand politicians and senior businesspeople still can’t distinguish broadband from 1970s show bands, new research indicates just how poor quality internet access can adversely impact the ability of small firms to run their businesses effectively.
A study by Webby Award-winning Freelancer.co.uk puts small businesses in the UK at odds with UK Culture Secretary Jeremy Hunt, who reiterated yesterday in a speech at the Google Campus building in London that broadband speed is more important than coverage.
The study found that 65pc of UK small businesses believe that there is still a rural urban internet divide, with many businesses in rural areas unable to take advantage of new business opportunities the internet brings.
In the neighbouring Republic of Ireland there is little evidence that broadband is even on the agenda and a strategy by the Next Generation Broadband Taskforce due to be published last month has been put back for another month.
According to recent research by Irish Rural Link broadband in rural areas continues to lag broadband in urban areas. A survey found that 70pc of Ireland’s urban households are accessing high speed broadband compared with 56pc of their rural counterparts.
In a recent conversation with Siliconrepublic.com, Irish Rural Link’s Seamus Boland said that the emphasis should be on finding ways of bridging the urban-rural divide and that satellite broadband services currently being peddled as solutions aren’t up to the job.
He said that small enterprises in rural areas are suffering badly because of inadequate broadband access, preventing them from maintaining or providing new jobs. He pointed out that water or electricity are not top of their agenda – but broadband is.
“The Government has given its blessing to satellite services as solutions. We’re simply not happy with the level of provision being offered by various commercial companies,” Boland said.
“When a small business in a local town tries to create five or six jobs they are prevented from doing so because the broadband coverage is rubbish.
“If you live in rural areas you are actually prohibited from applying for jobs because of low quality internet access.”
Boland makes an interesting point – both Amazon and Apple are recruiting for employees in Ireland who can work from home; unless prospective employees have at least 4Mbps or 5Mbps broadband at home they needn’t apply for the jobs.
“We are constantly being bombarded by companies eager to know if things have changed.”
Boland cited the example of a midlands food producer in Westmeath that employs 80 people and which recently won a major contract to supply a Japanese company.
“When orders started being processed, the owner of the midlands company didn’t have the heart to tell his new customer who has 90Mbps connectivity that he didn’t have sufficient broadband in Ireland. Instead, one of his colleagues spent the night driving around industrial estates on the edge of Mullingar, the nearest large town trying to download the orders onto her laptop via a mobile broadband connection.
“But this is a company that’s committed to staying in its local village and providing local jobs and stubbornly refuses to give in.
“A concentrated effort needs to be made to ensure small and medium firms have access to the quality broadband they require. If Minister Rabbitte is determined to bring 100Mbps industrial strength broadband to schools in rural areas then surely they can do the same for businesses in rural areas that contribute to the economy and can create jobs.”
As the Next Generation Taskforce prepares to finally roll out its strategy, what is clear is the necessity of preventing a damaging digital divide emerging. Northern Ireland is now the most fibre-dense region in Europe with 90pc of premises capable of receiving 80Mbps broadband. This contrasts harshly with the Republic of Ireland where outside major cities such speeds aren’t possible, fibre-to-the-cabinet is only being trialled, and next generation speeds in urban areas might only be possible via cable broadband.
It was recently pointed out that the UK is highly dependant on the internet and the digital economy. 7pc of the UK’s GDP comes from internet commerce, less than 4pc of Irish GDP comes from the internet economy, according to Boston Consulting Group. In real terms this is a difference of potentially €12bn in lost revenues for Ireland.
What is clear, is it is not so important how fast internet speeds are theoretically – it is vital that minimum standards of quality and availability can be met across the board to ensure no rural or small firm is at a disadvantage compared to urban or larger countrparts at home or overseas. Any responsible government of the day should be keen to meet this objective.
Again looking to the UK, the Freelancer.co.uk survey found that 65pc of small businesses are worried that if the UK Government continues to put speed over coverage many businesses in rural areas will suffer. They believe that the government isn’t interested in bridging this gap.
The survey showed that businesses in urban areas, such as the South East were just as worried as businesses in rural areas about the lack of consistent coverage across the country.
This survey comes as the internet and ecommerce is playing an ever important role in regenerating the economy, contributing more than stg£34.9 billion in the first six months of the year, according to IMRG Capgemini e-Retail Sales index. Yet businesses in rural areas are unable to take advantage of this growth.
Matt Barrie, CEO of Freelancer.co.uk, said it is crucial that internet coverage is consistent across the whole of the UK to support business development.
“Reliable and robust Internet access is essential for all UK businesses to take advantage of new business opportunities the Internet provides.
“It is isn’t just e-commerce, but businesses are now relying on cloud technology as well as carrying out important business communications. It shouldn’t be easier for someone in London to have a business Skype call with someone in Pakistan than with someone in Halesworth in Suffolk,” he said.
“UK business are using sites like Freelancer.co.uk to carry out business across the world, undertaking data research, marketing, programming and rebranding.
“We have seen 300pc growth but this is in urban areas. Rural businesses just aren’t being allowed to take advantage of the growing business opportunities that should be just a mouse click away.”