UK SMEs invest in online services

Firms are on track to beat 2005 spending on internet services according to market watcher

UK SMEs are on track to spend $1.2bn on improving their internet access services in 2006, an 11 per cent increase on 2005, according to analyst firm AMI Partners.

The analyst, which defines SMEs as one to 99 employees, said the trend is due to SMEs becoming more aware of the benefits of using broadband, including always-on, fixed-rate and the ability of internet applications to support internal business activities.

Melissa Chong, analyst at AMI Partners said: “With broadband penetration spreading to more than 60 per cent of the UK’s 1.6million SMEs companies are moving beyond basic connectivity and venturing into applications that enable more cost savings and greater efficiency.”

Chong said the UK’s broadband landscape has changed considerably over the last year with local loop unbundling, tailored service packages geared towards SMEs and ‘free’ broadband services provided by ISPs such as Carphone Warehouse, Orange, BskyB and Namesco.

“e-Banking will continue to be the most popular internet application among UK SMEs and e-procurement is also gaining wider acceptance,” she said.

AMI’s research revealed that while only eight per cent of UK SMEs currently use IP technology, around 20 per cent have tried it out. However UK SMEs expressed the least interest in online recruitment and order-entry applications.