The Welsh economy is suffering as inadequate broadband services deter investment and hinder the operations of existing businesses, claim MPs.

For a number of years, the availability of broadband has been consistently lower in Wales than the UK average, according to a report published today by the Welsh Affairs Committee.

Although services have improved, thanks to investment by the private sector and the efforts of the Welsh government, the latest figures from Ofcom suggest that the gap with the rest of the UK is still widening.

The report urges the UK and Welsh governments to work together to bring broadband services in Wales up to speed with the rest of the UK, and eradicate broadband “notspots” as a matter of urgency.

“Broadband will become an increasingly important generator of economic success and a means of addressing social exclusion,” said Chair of the Committee David Davies MP.

“It is hard to believe, but in mid-2012 there are still some areas of Wales where people have no connection at all. It is impossible to see how businesses or the economy can develop in these areas.”

The UK government has pledged to provide access to superfast broadband for 90% of the UK by 2013, and the Welsh government’s target includes a commitment to provide all Welsh businesses with access to next-generation broadband by the middle of 2016.

This may mean promoting mobile and satellite technologies, rather than relying solely on fibre optic cabling, according to the report. In the most remote parts of Wales, broadband service may only be made available through a mix of technologies, it said.

The Committee recommends Ofcom to undertake a study to evaluate whether satellite broadband should be supported more vigorously in Wales.

It also suggests that 4G mobile services must be made available to at least 98% of people in Wales, and that BT's market power should be regulated to ensure efficient operation of the market.

In July, the Welsh Government and BT penned a £425 million deal to deploy superfast fibre broadband to 96 percent of homes and businesses by 2015. Fibre-to-the-cabinet (FTTC) will be the primary technology used, providing speeds of up to 80Mbps.

“The roll-out of higher profile 'superfast' broadband must not detract from the highest priority, namely that everyone has a good, useable connection,” said Davies.