Government superfast broadband projects give £9bn business boost

Businesses covered by government-assisted superfast broadband rollouts have seen a combined £9 billion increase in turnover, according to new findings.

Broadband Delivery UK (BDUK) and other programmes saw central government, local authorities and telcos (most notably BT) roll out fibre to areas that were not considered to be commercially viable, an independent report found.

Other findings include a £690 million net increase in ‘Gross Value Added’ to the UK economy during the period between 2012 and 2016, the creation of 49,0000 local jobs and £12.26 of benefit for businesses for every £1 spent by government.

Government broadband

The report also said there is “strong evidence” that government projects have encouraged the telco industry to expand the scope of their own deployments.

More than 27 million homes and businesses are now covered by superfast broadband, equivalent to 95 per cent of the UK population. In areas where the government has intervened, adoption rates are as high as 45 per cent.

“Our rollout of superfast broadband across the UK has been the most challenging infrastructure project in a generation but is one of our greatest successes,” said digital minister Margot James. “We are reaching thousands more homes and businesses every week, that can now reap the clear and tangible benefits that superfast broadband provides. We are helping to ensure the downfall of the digital divide.

There are plans to increase this 98 per cent using alternative technologies like fixed wireless access (FWA) and satellite. This will be partly be funded by money returned by BT and other telcos for projects in which adoption rates exceed the original business case, a figure which is now as high as £500 million.

BDUK has been criticised for the amount off money handed to BT, which some claimed amounted to a state subsidy, and for the use of Fibre to the Cabinet (FTTC) technology rather than full fibre.

However BT itself has now committed to a ‘fibre first strategy’, while the government wants to bring fibre to the premise (FTTP) technology to the entire of the UK by 2033, at which point it will consider switching off the UK’s copper infrastructure.