Business Internet connection pricing. How much should I pay?

If your business leases its own private office space, it’s unlikely that a business internet connection is included in the price. You will therefore need to organise your own Internet connection.  The cost of a business grade Internet connection often comes as a surprise to business owners as it is vastly more than that of a residential Internet connection.

In this article, we will answer the most common questions we get asked about business Internet prices and the different internet connection options.

What type of Internet connection is best for my business?

Our usual response to this question is “it depends!” It depends on

• your business type
• the number of staff you have
• their typical Internet consumption
• your location
• And (of course) your budget.

This is all true and all these factors need to be considered, but there is an underlying must-have, regardless of your business profile. The best Internet connection for your business is a dedicated Internet connection service, also known as dedicated Internet access (DIA), and which is often commonly referred to as a leased line.

What’s the Difference Between a Leased Line and Business Broadband?

Regardless of the technology used to deliver your Internet service, connections fall into two categories.

A leased line is a dedicated Internet connection that only your business can use. It comes with guarantees for the speed it will deliver and the uptime of the service. It is also not shared with anyone else. This makes sense. You are paying for the connection, why should it be shared with someone else!

Business Broadband is a contended service where neither the speed you will get, nor the uptime of the service are guaranteed.  The term “contended” comes from the old days of the 20^th century where the Internet primarily ran over the copper phone lines that were run to every building in the country. An individual, physical copper line would be used to deliver the Internet services to more than one business; think of it as sharing a busy road with other road users.

With the advancement of technology, some of the restrictions of the copper wires have been overcome so not so much sharing of physical lines happens these days. However, the term still exists as these days a contended service means that the service provider reserves the right to reduce or throttle your internet speeds if there is a high volume of Internet traffic at any given time.

So how much does a business grade Internet connection cost?

Dedicated Fibre Internet leased line: Dedicated fibre services are available from the likes of BT, Colt or Luminet and will cost in the region of £350 + VAT per month for a 100Mbps leased line.

If you are lucky enough to have a business in the vicinity of the network infrastructure of one of the newer fibre providers such as Hyperoptic or G.Network, you can get a 100Mbps leased line (dedicated fibre) from around £80 + VAT per month. 

Note: Internet speeds are measured in ‘megabits per second’, often shortened to Mbits p/s or Mbps. Bits are tiny units of data, with a megabit representing a million. The higher number you have, the quicker your internet connection should be.

Unfortunately, as digging roads to install fibre is an expensive business and not to mention a time-consuming process, their services are not widely available and still restricted to a small number of postcodes.

Why are internet leased lines more expensive than residential broadband lines?

Great question! It comes down to a few key factors.

A residential (or business) broadband service is a contended service, you can spot these services as they will often use the term  “speeds up to 1Gbps” and can be bought for as little as £30-50+VAT per month.  There is no denying this price is competitive when compared to an Internet leased line, but remember from my earlier discussion, the service speed and uptime are not guaranteed.

The reason Internet leased lines are more expensive are

1. Speeds are guaranteed for leased lines. Businesses need certainty that they are getting the speed they are paying for. You do not get this certainty with residential lines.
2. Better SLAs (Service Level Agreements). With leased lines, service uptime comes with a guarantee, and compensation is given if the line goes down.

Symmetrical upload and download speeds. With leased lines, you benefit from the same ultrafast, reliable speeds whether uploading or downloading files. As businesses grow, upload speeds become more important as you may have servers on-site that people access remotely, or upload data to cloud-based services. With symmetrical speeds, accessing files from remote servers is just as quick downloading as it is uploading. With residential broadband, the upload speed is considerably lower than download speed.

So what is the best internet connection for my business?

If the above are not enough reasons to warrant taking up a leased line, let’s work backwards and look at the cost of NOT having a leased line.

Take an example of a small business with 10 employees performing “normal” office functions.

What is the cost of not being able to work effectively because the line is down, or not being able to video conference or upload documents because your Internet speed has been throttled? How much lost productivity is that and what is the monetary cost to the business?

Here’s a ‘back of a napkin’ calculation for you!

Assume you run a small business with an annual salary bill of £400,000 per year (before NI and pension contributions and all that other good stuff!).

A quick look at the figures shows just how quickly the hidden costs of either an outage or inefficiencies due to Internet speed can start to rack up – and this is just the cost of paying your staff; it does not factor in any potential loss of revenue.

The figures therefore suggest that a cost of circa £350 per month for a dedicated leased line with all the benefits it brings of reliability, speed for (in this case) the equivalent of 0.1% of the monthly salary bill represents good value for money.

If you would like advice on what business internet connection is best for your specific requirements, get in touch with us at Techsolve, and we’d be happy to help.