UK broadband is not fit for purpose and is lagging behind other nations’ services, according to a report by lobby group, the Federation of Small Businesses (FSB).
The group released a report claiming that the UK government's broadband targets, will not be good enough, even if they are hit.
The report found that 45,000 small businesses are operating with dial-up speeds despite 94 per cent of business owners saying a reliable connection is vital for success.
Only 15 per cent said they were “very satisfied” with their broadband service.
The group has demanded that the government should supply all homes with a minimum of 10Mbps (megabits per second) by 2018/2019 with an increase to 1Gbps by 2030.
The report said: "If small businesses are to thrive and prosper and contribute to a growing economy, they need universal access to what is now considered the fourth utility.”
John Allan, chairman of the FSB, said: “The fact that we have around 45,000 businesses still on dial-up is unacceptable and many more throughout the country, even in London, are receiving poor service.
"Evidence from our members shows this clearly is a problem affecting all corners of the UK, rural areas and cities alike. While progress has been made with the residential market, businesses have not enjoyed the same benefits, which is holding back their growth."
BT has suggested the report was "wildly inaccurate" and exaggerated how bad the UK’s broadband is.
A BT spokesperson said: "73 per cent of UK premises can access fibre - including some businesses who say they can't in this report - and that should rise to 90 per cent in under two years.
"Having said that, we know that many businesses are waiting for fibre and it may be they're prominent among the four per cent of FSB members that replied to this survey.
"The good news is that fibre should reach the vast majority of that four per cent in the coming months or next couple of years under existing plans."
This comes after MPs questioned BT services in rural areas earlier this summer.