Business

Broadband outages costing UK economy £17.6bn – but compensation is nowhere to be seen

Key findings of a productivity report launched today show that the UK economy has suffered a loss of £17.6 billion in economic output over the past 12 months due to connectivity outages. The total for London was £5.7 billion, representing just over 1% of London’s GDP.

The productivity report – commissioned by Vorboss, a provider of direct internet connectivity for business – reveals alarming figures regarding the economic impact of business connectivity issues in the UK.

More than half of businesses with a fixed business internet contract reported that they experienced at least one loss of service in the past year – that figure rises to 60% for London’s businesses. Almost a fifth of businesses reported experiencing three or more outages in the past year – again, that figure increases in London, with 28% being hit three or more times.

The average UK business lost over £11,000 In economic output due to connectivity outages in the past year. For businesses based in London, the loss was £18,620. That loss of economic value is due to an average 314 lost hours (nearly 40 working days) of productivity per London business. 30% of London businesses reported that outages forced longer working hours.

Yet, 61% of businesses that experienced an outage did not receive any compensation. Of those that didn’t ask for it, the two most cited reasons were that requesting compensation was not worth the time and effort and they didn’t expect to get compensation.

To solve the problem for UK businesses, Vorboss is urging Ofcom to introduce an automatic compensation scheme for fixed business connectivity providers.

Vorboss has written to Ofcom to encourage the introduction of a voluntary automatic compensation scheme for businesses, and offered to be a founding member as it introduces automated compensation for its own new and existing customers.

Ofcom introduced automatic compensation for consumers in 2019, and found that the scheme increased compensation payments and saw steps taken to fix issues. Vorboss believes now is the time to introduce a comparable scheme to protect UK businesses.

Tim Creswick, Founding CEO at Vorboss, emphasized the urgency of addressing these issues, stating: “As the data in this report shows, the productivity uplift that would come from improved network quality is massive.

“We should all be incentivised to compete on quality – that would force an uplift in network performance, and in turn drive a much-needed economic boost.

“Ofcom’s introduction of automatic compensation in the consumer market has been a success, pushing service providers to improve quality, while giving customers reassurance that compensation is real and tangible. If the scheme was extended to include businesses, we would see the same benefits, along with a significant productivity boost to London and the UK economy through reduced outages.”

Despite Ofcom’s previous interventions aimed at improving business engagement with Service Level Agreements (SLAs) and compensation, subsequent research has revealed low awareness of these provisions among businesses, alongside high dissatisfaction with the level of compensation provided.

Vorboss is launching automatic compensation to new and existing business customers served by its network, across both direct and wholesale channels. If Vorboss business internet goes down for more than four minutes, customers will automatically be compensated with at least one day’s worth of service credits. If it is down for more than 24 hours, customers will receive the full pay-out of two months’ worth of service credits.

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Broadband outages costing UK economy £17.6bn – but compensation is nowhere to be seen