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Introduction

Background

1.1 Ofcom is carrying out a market review ”The Business Connectivity Market Review” that focuses on the market for Business Connectivity Services, which carry voice and/or data traffic between business sites to enable all types of communications within an organisation.

1.2 Ofcom’s market reviews have three broad stages:

• Defining the relevant market (s) in terms of product and geography
• Assessing the level of competition in the markets identified
• Assessing the regulatory options within that market

1.3 In order to inform the definition of the business connectivity market on a forward-looking basis, market research was conducted by Holden Pearmain, on behalf of Ofcom, in early 2007 to provide evidence from the perspective of end-users. This document summarises the main results of this market research and the methodology used to conduct the research.

Research Objectives

1.4 The specific objectives of this research were to establish:

• Business end-users’ commercial needs (now and going forward) so that we can identify the different characteristics end-users value in relation to Business Connectivity Services,
• Information on the current data services and voice services they use (i.e. using dedicated leased lines, traditional Public Switched Telephone Networks, or using Internet Protocols). And whether they purchase these services separately and/or from different providers?
• What characteristics of connectivity services business end-users place most value on, and whether and how they trade-off these characteristics against each other;
• Business end-users’ perceptions of available business connectivity products and whether they consider that different products are capable of meeting their business connectivity needs and any barriers they face to switching between products;
• Given end-users’ commercial requirements, what are their intended purchases and potential migration to new business connectivity services going forward and why?; and
• To understand how business end-users would react to a small but significant change in price on one of their current business connectivity services. Where end-users were unlikely to use their existing service at an increased price – what action would they take? For example, this might entail: substituting to another product; being willing to sacrifice quality or other service characteristics for price; or withdrawing from using that product.

The full document is available below:

• Business Connectivity Services Review [pdf]
  Full print version

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