Analysis: Do businesses need superfast broadband?

Ofcom's recent report into UK broadband speed stirred up a lot of attention, not least when it gave firm confirmation that average broadband speed was below the maximum available in the UK.

It resulted in claims of rip-off Britain', where ISPs were supplying speeds lower than other developed countries, with some claiming it was a source of national shame.

Rupert Wood, principal analyst at Analysys Mason, told IT PRO this was an overreaction, stemming from tales of consumer dissatisfaction and demand for bandwidth from over-excitable bloggers.

He said that most consumers understood the limitations of what they were buying from ISPs, and that the speeds were dependent on the proximity of an exchange or the number of people online.

For businesses, he was unsure about whether the differences in speeds that Ofcom revealed in the survey really mattered: "The kind of applications businesses use are rather different than from the consumer. There's a lot less video."

He was referring to technology like IPTV, which he said was important when it came to the consumer market, but not so much when it came to small businesses.

"It's nice to have," he said. "But it's not necessary for most business applications."

However, Wood said that when it came to the possibility of national superfast broadband connections, users would obviously take them if they were available.

But he did give a reminder that these types of speeds were already available through cable services like Virgin Media, which recently launched a 50 Mbps service. These services are only available in certain areas, though.

Gordon Brown has suggested it is a vital lifeline for the British economy, while BT is already making steps to provide a national network.

But Woods was adamant that consumers would be the driver for these types of speeds. Wood said: "These are not upgrades for businesses.

"They may make more money from them and they will regard them as nice to have, but the higher speeds that you go to, you are replicating speeds that cable TV has already.

"That is entirely for the consumer market. Operators will get some customers out of the business market with new connections, but that's what it's not about."

Alex Salter, chairman of SamKnows, which carried out the Ofcom research, disagreed. He told IT PRO that businesses were interested in next-generation technologies - such as video conferencing and IPTV.

However, he did acknowledge that businesses were more interested in the reliability of a connection rather than how fast it was.

He said: "In the next three to six months, this conversation will be flipped on its head and it is going to be about businesses and enterprises, especially when politicians get behind a subject like this and looking for public projects to push the button on."