UK Businesses Aren't Benefiting From Competition In Communications Services

MORI survey shows that deregulation in telecoms has left business customers bewildered and wanting help

More than a decade after UK telecoms services were opened up to competition, business users are still not exercising their freedom of choice - with more than one-third admitting they are not confident that they are getting the best deals, and many confused by the proliferation of price packages and technologies from competing network operators. This is one of the key findings of More Competition, More Confusion, Customer Loses - an independent survey into how UK businesses buy telecoms services commissioned from MORI by Unica, a UK Integrated Communications Provider for businesses.

The survey of 301 senior managers responsible for telecoms -- at 100 SMEs (less than 250 employees) and 201 at large businesses (over 250 employees) across the UK -- reveals that many companies find it hard to juggle between different fixed, mobile and internet network operators, and that many would prefer an impartial intermediary to shop around on their behalf. Half of all the respondents want to consolidate all their communications expenditure on a single monthly invoice.

Only 25% of SMEs and 17% of large businesses are 'very satisfied' with their current network operator - the remainder being only 'fairly satisfied', neither satisfied nor dissatisfied, or dissatisfied. According to the survey, 53% of large businesses are frustrated by their account team being constantly reshuffled by the network operator, while 36% of SMEs accuse network operators of failing to understand their own products.

One-third of all respondents say they are locked into contractual obligations that prevent them from switching operators. Meanwhile, more than 75% of them accuse network operators of only being interested in selling their own branded solutions, rather than developing products and services tailored to their specific needs.

Noel Dunn, co-founder and managing director of Unica, commented: "With this survey, we wanted to understand the needs and frustrations of business users faced with the multiplicity of fixed, mobile and internet services now on offer. This is a market that has changed dramatically with deregulation. The downside is that competition has generated confusion and complexity."

"It's becoming difficult for businesses to make the right choice. Unica's mission is to simplify communications for UK business users, and maximise their buying power. By focusing purely on service provision, we challenge the view that the most efficient suppliers of communications services are the owners of infrastructure assets. Unica delivers a service combination of both consistently high quality and low price, that remains constantly up-to-date with new products, technology, providers and competitive pricing trends."

Other findings of the survey:

• Some 60% of large companies have changed network operator in the past five years, compared to only one-third of SMEs.
• Some 81% of large businesses switch network operator to get a cheaper price.
• Nearly half of all large businesses and 38% of SMEs find it hard to work out the best deals on offer.
• Two-thirds of telecoms managers at SMEs and 79% at large businesses say that their job function has become more complicated in the past few years, while 64% and 84% respectively want better management information from network operators.
• Some 48% of SMEs and 66% of large businesses want the flexibility to add and subtract services as their needs change.

"This survey shows that that business users are in danger of missing out on the opportunities generated by greater competition. There's a need to make the purchasing process much simpler and more transparent," said Alan Pyne of the independent telecommunications consultancy Schema, which helped develop Unica's business plan. "On the supply side, companies need to pay greater attention to the needs of customers. Suppliers have to more flexible and be quicker on their feet -- or else risk losing out to companies that are better able to assemble 'best-of-breed' service packages for business users."

Technical details

This research took place in August 2000. MORI conducted 301 telephone interviews with senior managers responsible for IT, telecoms and networking - 100 among SMEs and (businesses employing 2-249 employees) and 201 among businesses employing 250 or more. Data for SMEs was weighted to reflect the proportion of different company sizes.

About Unica

Unica offers integrated voice, data, IP and mobile services, as well as IT and value-added services. These include wide area and virtual private networking, dedicated internet access, streaming media services, audio and video conferencing, remote-back-up facilities, application serving, and web hosting and development services. Customers receive a single monthly invoice for all their communications. Web site: www.unicaworld.com