2017-03-24 

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Can Your Rural Business Get the Telecoms it Needs?

Dave Millett, from independent telecoms brokerage Equinox looks at the problems and the solutions to connectivity in rural areas.

It sounds idyllic; escaping the rat race of inner city life and retreating to the countryside and carrying on working. So many people work remotely that can’t be a problem, can it? Unfortunately, despite living in a country with 5th highest GDP it can feel at times as though our telecoms infrastructure has barely advanced since the dark ages in many rural areas, where business suffer from the unholy trinity of no phone coverage, no or very slow broadband and the expense of running in dedicated services.

Can Your Rural Business Get the Telecoms it Needs?

So how bad is it really for rural businesses, and what, if any, are the options?

When you realise the country, as a whole, rates 54th in the world for 4G coverage behind Peru and Albania and is at the bottom of Europe for Fibre to the Premise (FTTP) it is perhaps no surprise that rural areas suffer badly. Although compared to businesses in cities and on business parks they have done better with fibre broadband Internet access.

Internet

In 2011 the government set up the Broadband Delivery UK (BDUK) project, with the aim of bringing superfast broadband to 95% of the country by 2017. Superfast broadband is defined as an internet connection of 24Mbps or above. Most other countries define superfast as either 100mbps or 250 mbps. At the lower of these two measures we currently have about 2% coverage. Also that missing 5% represents 1.25 million homes that are being targeted with having 2mb as minimum.

Small fibre and Wimax providers are popping up throughout the country. The fibre providers offer speeds of up to 1Gb, and because they're pure fibre, there's no need for a landline - but they're incredibly restricted in terms of availability. Both offer ultrafast connections, and for reasonably competitive prices, but they're limited to a fairly small number of buildings or developments each.

Other small ISPs like LN Communications and B4RN have focused their efforts on small villages that have been suffering with poor broadband, while others only supply certain towns, like Gigler in Bournemouth. You can find what is going on in your county via https://www.cable.co.uk/guides/rural-broadband/

Businesses may look at dedicated lines as they guarantee speeds. The problem is that, unlike standard broadband, pricing is distance dependent. A small business in a remote part of Wales found the best price was over £1,000 a month for a 10mb circuit. If this option is being considered it is worth shopping round to find which supplier has the nearest network. It can mean a difference of more than 50% in price. The Government has announced some planned help for businesses in these areas but full details are yet to emerge.

Mobile

Lord Adonis’s recent report on 5G technology suggested the UK should aim to get 5G technology in place by 2025. Many people would say it would be nice if we could get 2G now. The industry has long hidden behind the favourite ‘95% of premises’ statistic of coverage. That stills leaves the 1.25 million homes without a signal and many will have experienced wandering around the house holding the phone up high as they try to find the one place that gets reception – often involving hanging out of a bedroom window. The industry is now admitting that over a third of the geographic land mass of the country has no coverage.

All the networks offer online checkers of their coverage which is worth consulting as they all have stronger and weaker areas. One step Ofcom and the Government could take to improve rural coverage is to force the networks to allow free roaming within the UK. From July 1st you will be able to roam free in Europe but not in the UK. The networks have resisted this step – the Government should now take action to force them and this reduce the number of not spots.

Also, there are boosters that can be plugged into broadband, assuming of course you have one that is fast enough, to improve the signal. If the coverage maps say you should get indoor service and are not, the network provider will usually you a booster for free if you push them and tell them you are leaving as they are not meeting their commitments.

Phone Lines

If you don’t have a phone line at your premises then BT and Kingston Communications in Hull are required to install lines at the standard price even it involves extra costs. Sounds good but there is a catch - as you might suspect. The extra costs up to £3,400 for phone lines and £1,000 for ISDN2 connections excluding VAT are free - above that the customer has to pay. That sounds a lot until you look at how the charges are built up.

A client of ours was recently planning to relocate to Scotland – the property they intended to buy was about one mile from the highway. The current owners used satellite but we discovered that the property was close enough to a BT cabinet to get fibre broadband. So far so good – all that needs to be done is put a phone line in. Based on the price list the cost was going to be about £20k. Now if you assume the fully loaded cost (salary, tools, van costs etc.) of a BT engineer is say £40k, and BT are quoting £238 to drill through an external wall – this means they expect that drilling to take them 10 hours. [If £40k is the cost of an engineer for a year – they need to drill 180 holes to cover his costs. The engineers work 230 days a year so that is 10 hours per hole.] A new pole is quoted as £705 – obviously that needs equipment and a chunk of wood, but nevertheless that price implies that each pole will take several days (which we know they do not).

Part of the problem is that the £3,400 limit has not risen in 10 years. With inflation that would be around £5k today. Whilst it could be argued that it is unfair on BT to force them to swallow the extra costs of supplying a remote property, it would seem fairer if this work was done at cost - not as a separate profit making venture.

For our client moving to Scotland, their only option is to to continue to use satellite for their business despite the area having being provisioned for fibre broadband. They will also have no landline connection and will have to rely on a mobile signal. The good news is that the costs of satellite broadband have now come down to under £100 a month. Whilst usage is capped and streaming films could make it expensive, it is now viable for businesses.

In summary, the choices still remain relatively restricted for most rural businesses but it does pay to explore all the options. A high percentage of people have not opted in for fibre broadband even when it is available. It is important to check its availability regularly and also check the mobile coverage maps as networks are changing where they offer service.

Equinox Communications

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