BT News

A fibre bright future for Northern Ireland

Press release   •   Apr 30, 2013 00:00 BST

Study reveals how fibre could offer £750 million boost to NI Economy 

Businesses across Northern Ireland could significantly increase their income and reduce operating costs, contributing hundreds of millions in revenue to the overall Northern Ireland economy by 2018, through the exploitation of fibre broadband. This is according to new research commissioned by BT into the potential economic benefits for Northern Ireland’s small and medium sized enterprises through the take up and use of fibre. 

The BT fibre business impact study, conducted by Regeneris* in January this year, studied specific sectors in Northern Ireland and sought to identify what benefits fibre could bring to companies within each industry by 2018. This included the creative & digital, agri-food, financial, retail and advanced manufacturing sectors. These were then compared with a sample of similar sectors in the United States, using data from the Strategic Networks Group (SNG), the broadband economists group that measures the transformational impact of broadband on businesses, communities and regions in the USA. 

The results revealed that the deployment of fibre by these sectors has the potential to generate over £750 million in additional revenue by 2018, saving circa(c) £45 million in operating costs in the process. 

In the US, 41% of revenue in the creative & digital sector, which in NI was recently singled out for investment by the Chancellor in his budget, has been attributed to use of the internet. By switching to fibre broadband, firms in this sector could potentially generate an extra £76 m in revenue, increasing the current value of the internet to these firms by almost 14%, according to the report. The findings also reveal that a switch to fibre could increase the proportion of sales generated through the internet in this sector from 39% to 50%. 

In the retail sector, findings revealed the potential to generate an additional £526 million in revenue through uptake of fibre with savings of c£29 million in operating costs also estimated.

The agri-food sector report revealed significant potential for both cost savings and revenue generation. A switch to fibre could help the industry generate c£82 million in additional revenue and save c£6.4 million in operating costs by 2018. [For further sector report findings, see Editor’s notes below] 

Enterprise Minister Arlene Foster today welcomed the report. Commenting on its conclusions the Minister said: “This report indicates that there are opportunities to be seized by local companies across many business sectors in Northern Ireland. The findings confirm that the investments that have been made in the telecoms infrastructure by the Executive can help boost the local economy. Significant investment has also been made by BT to push fibre optic technology deep into rural areas across Northern Ireland and as a result we are now one of the best connected areas in Europe. 

“I am pleased to see that we do have many local companies exploiting these technologies however I am mindful that there are still areas of Northern Ireland that are not able to benefit fully and I am taking steps to see how these businesses can be connected. 

“I would encourage our entrepreneurs and businesses to explore the technology to understand how it can improve their services, improve efficiencies or enhance their business processes. Advisory support services are available from DETI’s LogOn-NI service and Invest Northern Ireland.” 

Colm O’ Neill, chief executive, BT in Northern Ireland also welcomed the findings commenting, “In conducting this research Northern Ireland’s business base was matched to the SNG dataset based on a variety of parameters such as business sector, size and location to generate impact estimates. The aim in conducting the research was to evaluate the potential available across the various sectors through the take up of fibre broadband. There are clear indications that across many sectors there is room for significant growth. 

“We are in the enviable position in Northern Ireland of having available to us a world class fibre network that is ahead of the UK and Europe in terms of availability”, continues Colm. 

“Significant investment has been made by BT Ireland both through direct investment as part of BT Group’s £2.5 billion fibre roll-out in the UK and in its partnership with the Northern Ireland government for the Next Generation Broadband Project. 

“What we want to do is make sure that investment works for Northern Ireland Plc. The research demonstrates that much more can be made of the investment. In the creative & digital sector, as well as turnover being significantly increased, use of the internet can reduce operating costs by 11%; in the agri-food sector there is potential for firms to generate 31% of their revenue from the internet while increasing internet enabled cost savings by over 10%; and this story is similar for the other sectors researched,” he concludes. 

The fibre broadband network is open access, meaning that other internet service providers can use the network to provide competitive and innovative services to their customers. Currently 22 providers are using the network, delivering download speeds of up to 76Mbps and upload speeds of up to 19Mbps. For more information on fibre broadband and a list of providers, visit www.nibroadband.com. 

Ends 

Regeneris Report – Additional key findings: 
The figures below are based on the adoption of fibre by 40% of businesses in each sector over a five year period. 


Advanced manufacturing sector 
• 80% of US firms rank broadband as essential or very important for remaining in their location 
• 71% of US firms use collaborative tools which are made easier to use through fibre broadband 
• By exploiting fibre-enabled e-solutions, NI firms could generate c.£56million in additional revenue by 2018 
• Potential to increase sales generated through the internet from 24% to 30% 
• NI firms could together achieve additional cost savings of c£1.9m, an average of £2,700 per firm, by 2018 

Financial Sector 
• 80% of US firms rank availability of broadband as essential or very important to remaining in their location 
• NI firms could together generate additional revenue of c.£36million through use of fibre by 2018 
• They have the potential to increase revenue generated through the internet by 13% 
• A switch to fibre and the sort of e-solutions it allows business to deploy could increase internet-related cost savings by over 12% 
• NI firms could increase the proportion of sales generated through the internet from 41% to 52% 

Creative & Digital Sector 
• 37% of all new jobs in the creative & digital sector in the US can be attributed to use of the internet, with similar employment growth potential for NI 
• If NI firms match the performance of the US they could reduce operating costs by 11% through better use of the internet. They could also increase internet enabled cost savings by a further 14% and together save c. £5million in total by 2018. by 

Retail Sector 
• Switching to fibre could increase the proportion of sales generated through the internet from 31% to 40% 
• If NI matched the US, 29% of all new jobs in retail could be attributed to internet use in the next five years 
• NI firms have the potential to increase the proportion of sales generated through the internet from 31% to 40% through fibre uptake of e-solutions associated with fibre 

Agri-food sector 
The findings revealed that: 
• Agri-food firms could generate 31% of their revenue from the internet by 2018 through the deployment of fibre 

*Regeneris: Regeneris Consulting is an independent economics firm that provides research-based advice to major corporates, developers, national government bodies and local government. They regularly assess the economic impact of broadband investments in a number of locations across the UK. This work has informed business planning and bid development, including for a number of the current crop of BDUK projects and projects to help secure investment from European funding sources.” www.regeneris.co.uk 
*SNG: Data relates to a survey of 16,000 US firms using the internet