Networks

Businesses ‘Lost £12.3bn’ To Internet Outages Over Past Year

Matt Broersma is a long standing tech freelance, who has worked for Ziff-Davis, ZDnet and other leading publications

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A study finds that increasing business reliance on connectivity means heavier losses when outages occur

Two-thirds of the UK’s businesses were affected by Internet connection issues over the last year that affected their businesses, costing them £12.3 billion in lost productivity and extra overtime, a new study has claimed

The report, commissioned by business ISP Beaming, found 72 percent of British businesses, or about 3.9 million enterprises, experienced Internet failures during working hours in the year ending 31 March 2016, or 149 million hours of downtime in total.

Significant losses

cloud network

Each company reported an average of 43 hours of lost connectivity and £3,125 on average, or about £521 per employee, Beaming said.

The figures appear at a time when broadband is increasingly seen as key to the British economy, even such areas as farming, with network planning reforms being mentioned in the Queen’s speech last month.

The research found that 13 percent of businesses manage outages by switching to alternative connections, while one-quarter switch to tasks that don’t require the Internet.

But for 38 percent of organisations regular operations come to a halt with each failure, and 23 percent of those surveyed said they were obliged to remain open longer to catch up on tasks delayed due to outages.

Thirteen percent said they started losing money as soon as an outage began, rising to 28 percent after an hour offline and 46 percent after for hours.

Medium- and large-sized businesses lost the fewest number of hours to Internet outages, but lost a greater proportion of revenues per hour of downtime than smaller companies, due to the fact that they rely more heavily on Internet technologies and are usually unable to switch to another form of connection, the study found.

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Business-critical tools

cable fibreThe businesses studied said email was their most important Internet tool, with 81 percent saying they relied on it to stay fully operational, followed by voice at 51 percent, cloud applications at 36 percent, online sales tools at 34 percent and communication with a mobile workforce at 33 percent.

The report studied 500 companies using a range of Internet providers and connectivity services and Beaming said it worked with a mathematician from Imperial College London to quantify the results.

“Our increasing reliance on connectivity creates new risks for those that need it the most,” said Beaming managing director Sonia Blizzard. “The pace of business is now such that any downtime means missed opportunities, lost productivity and a huge amount of stress as businesses race to get back on track.”

Universal service obligation

Last month, as detailed in the Queen’s speech, the government confirmed plans to introduce a 10Mbps universal service obligation (USO) and reform to the Electronic Communications Code (ECC) to make it easier for communications providers to rollout broadband and mobile phone infrastructure.

A new Digital Economy Bill is to give every household the right to demand the new USO, but might have to contribute financially to the cost of connection in the most remote areas.

The Department for Culture, Media and Sport (DMCS) has already commissioned Ofcom to inform the design of the new USO and will report back by the end of the year, after which the government will start work on the secondary legislation which will regulate speed.

Superfast broadband coverage is expected to reach 95 percent by 2017 thanks to commercial and government-backed rollouts. It is hoped that other measures will increase that further, but some of the UK’s hardest to reach areas are seen as economically unviable.

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