Having a reliable and high-performance internet connection isn’t merely a utility; it’s a fundamental pillar of operational efficiency and competitive advantage.
Join us as we delve deep into how UK businesses can accurately calculate the ROI of a leased line, moving beyond the obvious monthly fee to reveal the tangible and intangible benefits that contribute to a healthier bottom line… we’ll explore the hidden costs of inadequate connectivity, the measurable gains in productivity, and the strategic advantages that a dedicated internet line provides.
The Hidden Costs of Poor Internet Connectivity: A Drain on Your UK Business
Before we dissect the ROI of a leased line, it’s vital to understand the financial haemorrhage caused by a subpar internet connection, as many businesses tolerate slow, unreliable broadband, unaware of the insidious ways it erodes profitability, we suggest you consider these “hidden costs”:
- Lost productivity: Imagine your team waiting for large files to upload to the cloud, video conferences freezing, or critical applications lagging – these seemingly small delays accumulate rapidly. A study by the Daisy Group suggested that poor connectivity costs UK companies an average of £500 per employee per year in lost productivity, so, for a business with 20 employees, that’s £10,000 annually simply evaporating.
- Downtime: Perhaps the most significant cost! When your internet goes down, so does your business… transactions cease, customer service grinds to a halt, and employees are left idle. Industry reports indicate that an hour of internet downtime can cost a small or medium-sized UK business upwards of £900, while larger enterprises face tens of thousands.
- Frustrated eemployees and reduced morale: Constant buffering, dropped calls, and inaccessible cloud resources can lead to significant frustration amongst staff which impacts morale, reduces job satisfaction, and can even contribute to higher staff turnover – another hidden cost.
- Poor customer experience: In an age where immediate gratification is expected, slow online services, delayed responses, or unreliable communication channels can drive customers away – this translates directly into lost sales and a tarnished brand image.
- Limited cloud adoption and innovation: Modern businesses rely heavily on cloud-based applications, and without a robust, symmetrical, and low-latency connection, leveraging these tools effectively becomes impossible, hindering innovation and growth.
- Increased IT support costs: Constantly troubleshooting connectivity issues, dealing with slow performance, and managing outages diverts valuable IT resources.
Calculating the ROI of a Leased Line: Beyond the Obvious
The ROI formula for any investment is:
ROI = (Gain from Investment – Cost of Investment) / Cost of Investment
When it comes to a leased line, the “Cost of investment” is relatively straightforward: the initial installation charges (often waived with longer contracts) plus the recurring monthly fees over the contract term. The real art lies in quantifying the “Gain from investment.”
Example calculation
Let’s assume a small UK business with 15 employees:
Costs:
- Average leased line monthly cost: £250 (excluding installation if waived)
- Annual cost: £250 x 12 = £3,000
- Over a 36-month contract: £3,000 x 3 = £9,000
Gains:
- Productivity: Each employee saves 10 minutes/day (approx. 40 hours/year), and with an average hourly cost of £20 per employee: 15 employees * 40 hours * £20/hour = £12,000 saved annually.
- Downtime avoidance: Current broadband experiences 5 hours of downtime annually, costing £900/hour: 5 * £900 = £4,500. Leased line reduces this to 0.5 hours: 0.5 * £900 = £450. So your annual saving is: £4,500 – £450 = £4,050.
- Improved cloud efficiency: Estimated £1,500 annual value from faster access to critical cloud applications and more reliable backups.
Total annual gain: £12,000 + £4,050 + £1,500 = £17,550
Annual ROI: (£17,550 – £3,000) / £3,000 = £14,550 / £3,000 = 4.85x or 485% annual ROI.
Over the 36-month contract: Total Gain = £17,550 * 3 = £52,650 Total Cost = £9,000 Total ROI: (£52,650 – £9,000) / £9,000 = £43,650 / £9,000 = 4.85x or 485% over the contract term.
Choosing Your UK Leased Line Provider
The UK market has a robust selection of leased line providers, each offering different strengths, and pricing is highly dependent on factors such as location (proximity to fibre exchanges), required bandwidth, and contract length (longer contracts often mean lower monthly fees and waived installation).
Below is our handy table outlining some prominent UK leased line providers and what they typically offer, along with general considerations.
| Provider | Redundancy options | Dual carrier Support? | From |
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Diverse routing, dual links | Yes | £399 + redundancy |
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Dual-site connectivity | Yes | £400 + |
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Separate routes, SD-WAN | Yes | £450 + |
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Active-passive options | Limited | £300 + |
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Multi-site and resilient WAN | Yes | £375 + |
