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SMBs held back by poor, unreliable Internet connections: survey

Poor broadband connections are hindering the growth of Australia’s small businesses, according to a new report which reveals that many SMBs have difficulty accessing fast, reliable and affordable Internet connections.

New data from accounting software company Xero found that Internet access is difficult for a third of Aussie SMBs.

Xero says that the national broadband network rollout began in 2010, yet many of Australia’s small businesses are still paying for poor connectivity today, with:

  • Around half of small businesses (48%) struggling to reach and bring in new customers as a result of their poor phone or Internet connections;
  • Seven in ten small businesses (70%) saying poor connectivity is hindering their efficiency and productivity; and
  • Nearly two-thirds (62%) believing the quality of their customer service is affected by poor phone and Internet connection.

The survey of more than 1000 small business owners across Australia looked at how phone and Internet connectivity affects business productivity, hiring, and growth, and also found that over one in three small businesses headquartered in Western Australian faced connectivity woes (36%), while around a quarter (26%) of New South Wales businesses had connectivity issues.

Xero Australia managing director Trent Innes said: “Small businesses are the lifeblood of many regional towns, yet there’s still a major digital divide compared to metro areas.”

“If Australia is truly committed to our small businesses, it’s imperative that all businesses have access to quality Internet connections to help them do their jobs better. Whether they’re in Melbourne CBD, or regional Darwin, we need to level the playing field. The rollout of the NBN is a step in the right direction, and may begin to bridge the gap, but more needs to be done.”

According to Innes, there is a digital disparity, and regional businesses are particularly at risk when it comes to a secure and fast internet connection.

Innes also cites the experience of Wagga Wagga-based accountancy firm Paisley Robertson.

He says that despite having their Internet server in Sydney’s metro area, they were recently left without a connection for three hours due to issues with their Internet service provider.

“As a business that charges for our time, having a three-hour blackout equated to three hours of no productivity and had a direct impact on our ability to service clients and generate revenue. We’re very reliant on being connected to our clients, and huge issues arise for us when we’re cut off,” said Natalie Payton, accountant at Paisley Robertson.

"With some of our clients, their Internet connection is so poor that we have to go back in time and manually print out coding reports and fax them across. Clearly, this is a more laborious and inefficient way to work."

But, according to Xero, despite poor connectivity, business owners are staying put, and are reluctant to move in search of better Internet connections

“The research has found that small business owners are, on the whole, unwilling to move to a state or city with a better Internet connection, and rightfully so. Having spent time with regional small businesses, it’s clear that they have a lot to offer the Australian economy. There need to be policies in place that enable regional businesses to thrive.

“Small businesses are the engine room of the Australian economy – they employ half of all Australian workers and generate a fifth of our GDP.

“If we want small businesses to succeed, we need to equip them with the tools to help them grow and perform. Currently, our small businesses are being seriously let down by the below-par connectivity available to them and that needs to change.”

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).