The majority of Britain's small businesses are not using fibre broadband, a report by the telecoms regulator has revealed.
Although speed and reliability of internet services were the two key issues facing the UK's smaller firms, 67 per cent of businesses are using a non-fibre fixed line ADSL connection, a study of over 1,500 firms commissioned by watchdog Ofcom found.
Many of the employees surveyed said that when travelling in sparsely populated areas of the UK, they became increasingly reliant on mobile phones. As a result they expressed frustration with phone coverage and the reliability of services.
"The internet could be problematic for some small and medium-sized enterprises. Those with an internet connection were very reliant on it," the reported concluded.
Nevertheless, 82 per cent of respondents felt their business needs were well served by the "communications market".
However, over a third (34 per cent) did not feel well informed about how communications services could help their business survive and grow. One in seven people believed their firm's growth had been stifled by a lack of suitable products and services.
Small business leaders stressed the importance of fast and reliable internet access for the sector.
"If small businesses are to compete in the new digital economy, they need to be able to get online and have proper access to the mobile services they need," said Federation of Small Businesses national chairman Mike Cherry.
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Smaller firms were unable to download speeds of more than 10 megabits per second – a level the government has promised to deliver under its Universal Service Obligation (USO), the December report found.
Cherry continued: "An ambitious USO, intended to give everyone the right a decent broadband connection on reasonable request, is essential to get all small businesses connected. The USO must also include hard to reach areas to ensure rural businesses have the same level of connectivity."