The festive period is an important time of year for the digital economy, whether it’s the mass migration of consumers from the high street to online Christmas shopping – up 14.1% this year and estimated to hit a whopping $143.7bn – or the internet access required for wish lists abundant with high-tech gadgets and toys.
Even when you remove Christmas commodities, most of us use video calling, social media and online messaging platforms – all of which require internet access – to share well-wishes with family and friends at this time of year.. In fact, a lot of us would probably struggle to get through the holidays without any internet.
Yet there are still two million households in the UK that do not have any internet access at all, not to mention the many thousands of homes and businesses in rural communities where broadband is so slow that most online activities become excruciating. The news headlines always flash with warnings for the retail sector at this time of year, but how much harder must it be if you run an independent business reliant on an unreliable internet connection?
The Queen’s speech in October included “new legislation that will help accelerate the delivery of fast, reliable and secure broadband networks to millions of homes,” and with all the major parties making promises in relation to broadband ahead of the general election on 12 December, connecting forgotten communities and speeding up broadband for everyone else is a hot topic.
The ghost of broadband past: what happened to a nationwide infrastructure?
As early as the 1970s, telecommunications experts had begun to foresee the inadequacy of the UK’s existing copper network for a rapidly evolving digital world. In 1979, the chief technology officer of BT, Peter Cochrane, delivered a report that demonstrated the economic benefits of switching to a fibre infrastructure; by 1986, he had managed to deliver fibre to homes at a cheaper cost than copper. As a result, BT committed to a full fibre rollout, building multiple factories to make the system’s components.
At the time, the UK was neck and neck with countries such as Japan and South Korea in terms of broadband coverage, but in 1990, in the interest of keeping the broadband market competitive, then prime minister Margaret Thatcher halted BT’s nationwide fibre optic plans. According to Cochrane, the UK’s competitors could not believe what was happening. “What was pivotal was that [Japan and Korea] carried on with their respective fibre rollouts. And the rest is history,” he said.
Left behind in the broadband dark ages
Today, Japan boasts a full fibre coverage of 95% and South Korea has coverage even more extensive than that, while the UK has managed to implement full fibre broadband to only 8% of homes and businesses. This places the country 25th out of 28 European Union nations, and in Ofcom’s Connected Nations report, which looked at broadband provision in 19 countries in December 2018, only Nigeria ranked lower in terms of full fibre coverage.
The government’s newest plans, outlined in 2018 by the Department for Digital, Culture, Media and Sport, are to roll out full fibre broadband coverage to every home in the country by 2033, but with the election fast approaching – and new promises with it – who knows what the reality will be?
Voneus offers hope for the future
The implications of the delays to fibre rollout go far beyond the UK’s efforts to compete in the global rankings for broadband speed. The denationalisation of the broadband market, which was intended to promote greater competition, instead encouraged unequal investment, with businesses focusing on the areas that would be most profitable – densely populated cities and towns. As a result, many rural communities are now unserved or underserved by the big telecoms companies, almost 30 years on.
Voneus, however, is a business that is trying to set things straight. The company is one of the UK’s largest specialist rural broadband providers, delivering a service to more than 4,500 homes and giving rural communities access to speeds they have never reached before.
After exiting BOOST&Co’s portfolio earlier this year, following the successful completion of a £4.8m growth capital loan, Voneus went on to secure a £10m investment from Macquarie Capital (rising to a potential £30m) that will help the business to reach its target coverage of 30,000 connected homes, some of which will be on full fibre.
“The relationship we have built with BOOST&Co is extremely important to Voneus,” says the company’s chief executive, Steve Leighton. “At the time of BOOST&Co’s investment, we were at a very early stage. We were struggling to raise money elsewhere but needed capital if we were to have any chance of growing our customer base.
“BOOST&Co came along and said ‘we’ll solve that problem’, and with its investment, we grew from 300 connections to 4,500. Aside from the financial offer, BOOST&Co was extremely supportive to the business – something that has directly influenced Voneus’s success.”
“Businesses like Voneus are crucial for the future of the UK in the global digital economy,” says Joanna Scott, principal at BOOST&Co. “In a developed country, still to have millions of homes without internet access, or with poor quality internet speeds, is not good enough. The work Voneus is doing to empower rural communities is a great step forward and I hope that the new investment from Macquarie will enable the business to continue its growth and success.”
So, when you manage to FaceTime your relatives this holiday season, or succeed in connecting your child’s new tablet to the wifi (peace at last…), give a thought to those in the UK who cannot do the same – and also to Voneus, which is doing its bit to try to put that right.