Tech City needs better communications infrastructure
If London's Tech City is to fulfil its promise of becoming Britain's answer to Silicon Valley, it needs a world-class telecoms infrastructure to support the entrepreneurs living and working there, and encourage new businesses to set up shop in...
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At the moment this is not the case. Although people in the UK now get 22 percent faster broadband speeds than a year ago (according to Ofcom's latest figures), more than 40 percent are stuck on speeds of 10Mbps or less, and London is also lagging behind other cities in the UK in terms of 3G speeds.
Not much of an incentive for hi-tech digital media companies to migrate to East London then.
Networking company Ciena, which supplies fibre optic infrastructure to the Tech City area, reckons this is a classic chicken and egg situation. In the current economic climate, telcos are reluctant to invest in fibre infrastructure unless they know there is demand for it; at the same time, many enterprises are unaware of the potential for higher speeds.
“There is potential to fibre up the whole area. There are fibres in there, depending on where you are, and if your enterprise is big enough and the fibre is 100m away, the local provider will bring it to you,” said Mervyn Kelly, EMEA Marketing Director of Ciena.
“It will be interesting to see, as part of the whole Tech City initiative, if some of these guys like BT and Virgin Media decide to fibre the whole lot up. The big question is whether they will continue to charge businesses a one-off fee to lay the fibre or whether they will do it proactively.”
One thing that would really drive this, according to Kelly, is government investment. The main reason that countries like Japan and Korea have such fast broadband is because the infrastructure is government-subsidised. While the UK government does support broadband rollout, the amount of investment is relatively small and is mainly restricted to rural areas.
As a community, Tech City currently has the attention of the government, and is therefore in a good position to pile on the pressure. And once the ball is rolling, fibre infrastructure will benefit not only the telcos and entrepreneurs in Tech City, but also the economy as a whole. Research has shown a direct correlation between good connectivity and GDP growth.
Shared working spaces such as TechHub and The Hoxton Mix are an ideal place to start, according to Kelly, as they often contain a critical mass of businesses and entrepreneurs, all demanding fast and reliable broadband.
“If there's enough of you, and you're all asking for this sort of thing, then it's in the service providers' interests to actually make it available to you,” he said. “I guarantee any of our service provider customers would jump at the opportunity.”
With many of the Tech City entrepreneurs developing mobile applications, the next step will be to get 4G trials up and running in the capital. O2 has today announced the results of its London pilot, demonstrating mobile broadband speeds up to 150Mbps, and Everything Everywhere hopes to begin rolling out 4G before the end of the year.
Of course, LTE won't become widespread until after Ofcom's 4G auction next year. However, if Tech City can remain at the cutting edge of development, there will be a greater incentive for those driving innovation to make it their home.
High quality communication infrastructure is vital to the future success of the Tech City project, but it is up to the businesses there to demonstrate their need for it.
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