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Small providers best positioned to distribute business broadband vouchers

Thursday, December 11th 2014 by Phil Wilkinson-Jones

Small internet providers that can adapt their business models are in the best position to distribute the government's business broadband vouchers, according to the head of digital development at Metronet (UK).

Metronet is a hybrid wired and wireless internet service provider and has realigned its business processes in order to meet the Super Connected Cities funding criteria.

Only Virgin Media Business has given out more of the vouchers since the scheme was launched in 2013.

Head of digital development Kate Rennicks told Cable.co.uk: “The voucher scheme lends itself quite well to alternative providers.

“With big organisations like BT, it’s hard to turn the Titanic but the providers who are doing well under the scheme are small independents.

“We have entirely focussed our sales team on vouchers and we have left the rest of what we do to the rear.

“What this allows us to do is to really look at more strategic selling, so working with landlords and particularly in multi-dwelling units, we’re able to connect a lot of customers all in one go, very quickly in a lot of cases.”

She said internet service providers that buy infrastructure from BT or Virgin Media were faced with minimal install costs and so found it hard to justify the cost of a voucher.

Metronet installs its own infrastructure using a combination of fibre cable and wireless leased lines.

“It’s radio point-to-point effectively so it’s only the last bit that’s radio. That does make it a bit easier with the voucher scheme,” said Ms Rennicks.

She said small and medium-sized enterprises (SMEs) had reported huge savings after using the voucher scheme.

“We are [also] working with a number of landlords who’ve been able to group together vouchers within their buildings for SMEs and have been able to have a full infrastructure refresh.

“So that’s money that they would have to spend on connectivity anyway so they’re getting the benefit of sometimes hundreds of thousands of pounds to spend in their buildings to upgrade it for 20, 30, 50 centres at once.”

'A political issue'

Ms Rennicks gave the examples of Afflecks Palace in Manchester and the Custard Factory in Birmingham, where businesses have grouped together to install both high-speed broadband and public wi-fi.

She said the extension of the scheme for a further 12 months – and the possible rollout to as many as 30 new cities – gave Metronet the potential for network expansion.

“We’ve used it so far to grow with private network infrastructure that we’ve paid for into Newcastle and Bradford because we can access vouchers in those cities.

“When the scheme ends from a funding perspective, nobody knows really. It’s going to be a political issue – there’s an election between now and the end of the next financial year.

“I think everybody accepts that connectivity improves the economic potential of cities and we certainly very much see that and we hope the politicians continue to do so.”

Chris Townsend, chief executive of the government’s Broadband Delivery UK programme, praised independent providers when he spoke at a Super Connected Cities seminar in Birmingham last week.

“Over 90% of the vouchers have been distributed by smaller suppliers – BT isn’t even in the top 10 at the moment,” he said.

Malcolm Corbett, chief executive of the Independent Networks Co-operative Association, said: “INCA members are very supportive of measures which help smaller suppliers to grow their businesses, so it is great that 90% of the Super-Connected Cities vouchers have gone to independent providers.

“We are keen to work with BDUK to encourage take-up amongst SMEs, particularly where it leads to significantly improved, affordable fibre and wireless infrastructure.”

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