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Business use of Fixed Telephony, Oftel Small and Medium Business Survey - May 2001 |
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Q4 February 2001  Contents
Main Findings - 3. Business use of fixed telephony 4. Satisfaction with fixed telecoms services
1.1 This report provides an overview of the key findings in the fixed telecoms market, taken from the fourth quarter 2000/01 of Oftel’s quarterly business survey conducted in February 2001. Results from previous quarters are used for comparison purposes and referred to throughout this report. 1.2 The survey was conducted among 700 businesses, comprising 400 small (1-50 employees) and 300 medium (51-500 employees) (see note 1 below) businesses located across the UK with a minimum turnover of £50,000. Quotas and weighting were applied to small and medium businesses separately so that the sample was representative of total SMEs (Small and Medium Enterprises) in the UK in terms of business size, industry sector and region (see note 2 below). 1.3 The fieldwork was conducted on behalf of Oftel by Continental Research during February 2001. This report has been prepared by Oftel (see note 3 below) based on the results provided by Continental Research. 1.4 The report covers:
Notes: 1. Some
sources of data (including the DTI SME Statistics) define SMEs as employing
between 1-249 staff though the definition of medium businesses is arbitrary,
defined sometimes by number of employees, sometimes by turnover. The
current survey included businesses with up to 500 employees in order
that the survey was as inclusive as possible. It was felt that, from
the point of view of telecoms purchasing, little difference existed
between businesses with 249 employees and those with 500.
2.1 Overall, medium sized businesses are still making greater use of the choices available in the fixed telecoms market than smaller businesses. 58% of medium businesses use more than one supplier, compared with 27% of small businesses. Medium businesses were as likely as small businesses to use BT (both in the region of 90%) but were more likely to do so in conjunction with other suppliers (53%) compared with small businesses (25%) who were more likely to use BT as their sole supplier. There has been little change in these figures since June 2000. 2.2 Medium businesses were twice as likely as small businesses to have changed their fixed suppliers (42% and 19% respectively). The June survey reported that the majority of those who had switched found the process easy, although some businesses, particularly those with a range of telecoms services eg Internet, expressed difficulties in comparing suppliers’ prices and quality of service. 2.3 Overall satisfaction with fixed telecoms services remains high at 93% despite experiencing a slight drop since November 2000 (from 96%). Accuracy of billing and reliability of service were still the most satisfactory aspects of the service, although satisfaction with reliability has been gradually declining since June 2000. Satisfaction with overall value for money, and with call costs, experienced quite significant drops during February 2001. 2.4 Medium businesses (who appear to be making greater use of competition in terms of number and range of suppliers used) tended to be less satisfied than smaller businesses on all aspects of their fixed service apart from call costs and overall value for money. 2.5 About of third (32%) of businesses had complained to their telecoms supplier (either fixed or mobile) at some point. A considerably higher proportion of medium businesses (57%) than small businesses (31%) had complained. Only half of businesses who had complained said they were satisfied with the way their complaint had been dealt with by their telecoms supplier, mainly due to lack of satisfactory resolutions and poor communication from their supplier. A third of businesses said they would consider going to Oftel if they were dissatisfied with the way their telecoms supplier had handled their complaint. A similar proportion of businesses however said they were not aware of any organisations who could assist with their complaint.
Main Findings
3. Business use of fixed telephony 3.1 Small businesses in the UK had on average 6 individual lines for their fixed telecoms services (including voice, faxes, and data lines), whilst medium businesses had an average 49 lines. One person businesses had an average of 2 lines. Business use of fixed lines is shown in figure 3a. 26% of small businesses surveyed were using a single fixed line, which is in line with previous quarters.
Figure 3a UK
SME business use of fixed lines
3.2 The average monthly spend on fixed telecoms services (which includes call costs, rental, maintenance and VAT for all voice, fax, Internet and data services) amongst small businesses was £337, compared with £3961 for medium sized businesses. Average spend levels across different types of businesses are shown in figure 3b. Quarterly data has been combined for the November and February surveys for individual business types, to provide more robust sample sizes on which to base conclusions.
Figure 3b Average
monthly spend per business on fixed telecoms services
* Caution should be applied as combined base size less than 100
Awareness of choice
3.3 Overall, 62% of SMEs said that they were aware of a cable company in their area and 52% were aware of indirect access suppliers. Awareness of cable alternatives has been at a similar levels across recent quarters, whilst awareness of indirect suppliers has returned to a comparable level to August 2000, following a brief improvement during November. These fluctuations may be related to marketing activities in particular areas.
3.4 Awareness of alternatives to BT remains consistently higher amongst medium than smaller sized businesses as shown in figure 3c. Figure
3c UK SME business alternatives suppliers to BT
3.5 Awareness of indirect operators was highest amongst businesses using more than one supplier, heavier telecoms spenders and those with other technologies such as Internet and mobiles. Awareness of indirect operators was lowest amongst one person businesses at 20%.
Use of fixed telecoms suppliers
3.6 The vast majority of small businesses use only one supplier for their fixed line services. 27% use more than one, compared with 58% of medium businesses. There has been no change in these figures during the last quarter. Figure 3d shows multi-supplier usage amongst different types of businesses.
3.7 Use of more than one supplier for fixed telecoms services was higher than average amongst businesses with more than one site, which is unsurprising given that the geographic availability of alternatives may differ. Multi-supplier usage was also more popular in companies making greater use of telecoms, including those with Internet, heavy monthly spenders, and to a lesser extent those with mobiles.
Figure 3d
% UK SME businesses using more than one supplier for fixed telecoms
services
3.8 Overall 92% of SMEs use BT for some or all of their fixed telecoms services. Medium businesses were considerably more likely to use BT in conjunction with another supplier, compared to small businesses, two-thirds of whom used BT as their sole supplier (figure 3e). There has been little change in these figures since June 2000.
Figure 3e UK
SME business use of fixed telecoms suppliers
Switching supplier
3.9 On average, a fifth of SME businesses said they have changed supplier of their fixed telecoms services. This is slightly lower than in previous quarters, but remains higher amongst medium than small businesses as seen in figure 3f.
3.10 Switching was higher than average amongst multi-site businesses (29%), businesses with Internet (47%) and interestingly those without mobiles (28%) – it is encouraging to see that although these businesses are not using the full range of telecoms technologies, some at least are shopping around for better deals on the services they do use.
Figure 3f %
UK SME businesses who have changed supplier of their fixed telecoms
services
3.11 The June 200 survey reported that the vast majority (91%) of SME businesses who had switched supplier found the process easy. Significant proportions however reported difficulties comparing suppliers’ prices (54%) and quality of service (48%), which seems to be considerably more difficult for those using a wider range of services eg Internet.
4. Satisfaction with fixed telecoms services 4.1 Overall satisfaction with fixed telecoms services remains high amongst UK SMEs at 93% which is broadly in line with previous quarters, but following a small improvement during November has returned to the levels seen in June and August. This is shown in figure 4a. Satisfaction remains higher amongst small (93%) than medium sized businesses (84%) as seen in figure 4b. 4.2 Satisfaction remained highest for reliability of service and accuracy of billing, and also fault repair and provision of service – all of which, apart from reliability of service, have remained virtually unchanged since November. Reliability of service has fallen since June 2000 and we will continue to monitor it in future surveys. The most recent drop may be seasonal, with bad weather causing more faults, which is in line with CRS (Oftel’s Consumer Representations Section) experience of the impact of seasonal factors on faults. When comparable performance data (provided by the telcos at www.cpi.org.uk) becomes available for the period June to December 2000, we will examine whether there has been any obvious decline in reliability of service that may have caused this drop in satisfaction. 4.3 There has been some improvement since June in businesses’ ability to get hold of the appropriate person at their supplier when necessary, and this improvement has been sustained during February 2001. 4.4 Between November 2000 and February 2001, there was a significant drop in businesses’ satisfaction with both call costs and overall value for money. This may be due to recent changes to a BT package targeted at single line businesses, who form a significant part of this survey. A change in the way in which this package was presented may have resulted in business perceptions that they were not getting as good value for money compared with previously. Additionally, there was a rise in BT line rental during this period. Figure 4a %
UK SME businesses satisfied with various aspects of their fixed telecoms
services
4.5 In addition to lower levels of overall satisfaction, medium businesses tended to be less satisfied than smaller businesses on most aspects of the fixed telecoms services apart from cost of calls and overall value for money where satisfaction levels were similar. Service provision and finding an appropriate person were the areas of greatest difference (figure 4b). Figure 4b %
UK SME businesses satisfied with various aspects of their fixed telecoms
services
Satisfaction with complaints to telecoms suppliers 4.6 About a third (32%) of UK SME businesses said they had made a complaint to one of their telecoms suppliers (this included either fixed or mobile suppliers). Medium businesses were considerably more likely to have complained (57%) than small businesses (31%). Complaints were also higher than average amongst multi-site and multi-supplier users, high monthly fixed line spenders, and those with a range of telecoms services including Internet and mobiles. 4.7 Satisfaction with the way in which their complaint had been handled was fairly low at 49%, as shown in figure 4c. Figure 4c UK
SME business satisfaction with complaint handling by telecoms suppliers
4.8 The high levels of dissatisfaction with complaint handling were driven primarily by lack of satisfactory resolutions from the point of view of the business, and dissatisfaction with the way in which the complaint was handled (figure 4d). Figure 4d Reasons
for dissatisfaction with the way telecoms suppliers handle business
complaints
4.9 All businesses were then asked who else, apart from their supplier, they would contact if they were dissatisfied with the way their supplier had handled their complaint. As seen in figure 4e, well over half of businesses said they wouldn’t contact anyone else or weren’t aware of who could assist them. Oftel was the most popular choice amongst those businesses who would contact someone, whilst a small proportion said they would contact bodies such as Trading Standards, Citizens Advice, Office of Fair Trading, or business organisations and trade associations. Figure 4e Organisations
businesses would contact if dissatisfied with the way their complaint
was handled by their telecoms supplier 33% Oftel
Medium businesses still making greater use of competition for fixed telecoms services 5.1 Overall, medium sized businesses still tend to be making greater use of the choices available in the fixed telecoms market than smaller businesses. Medium businesses were twice as likely as small businesses to use more than one supplier. And although they were as likely as small businesses to use BT (both in the region of 90%) they were more likely to do so in conjunction with other suppliers whereas small businesses were more likely to use BT as their sole supplier. Medium businesses were also twice as likely as small businesses to have changed their fixed suppliers. This greater use of competition may be partly due to awareness of alternative suppliers, as almost half of small businesses were not aware of indirect suppliers (compared with a quarter of medium businesses). 5.2 As a result of their greater use of competition medium businesses tended to be slightly more satisfied than smaller businesses with the value for money they received from their telecoms suppliers, in particular the cost of calls. They were less satisfied however on other aspects of service such as finding an appropriate person, service provision, and fault repair. This is possibly a result of having to deal with a number of suppliers, or possibly they have developed higher expectations as a result of shopping around and making comparisons between companies. They were almost twice as likely as small businesses to have complained to their telecoms suppliers. Drop in satisfaction with fixed telecoms services 5.3 Although overall satisfaction with fixed telecoms services amongst businesses remains high at 93%, it experienced a slight drop following a rise during November. Reliability of service is still one of the most satisfactory aspects of the service, but has been gradually declining since June 2000, most recently amongst small businesses primarily. Satisfaction with overall value for money, and call costs also experienced quite significant drops during February 2001. This is possibly due to recent presentational changes to a BT package targeted at single line businesses (who form a significant part of this survey), resulting in perceptions that prices have changed, which along with an increase in line rental during this period, may well have contributed to the decline in satisfaction with value for money. Half of businesses dissatisfied with the way their telcos handle complaints 5.4 About a third (32%) of businesses had complained to their telecoms supplier (either fixed or mobile) and only half of these were satisfied with the way their complaint had been dealt with. This was partly due to lack of satisfactory resolutions, but of more concern, also due to poor communication by the telecoms supplier resulting in the businesses having to chase their supplier to deal with the complaint or experiencing difficulties in contacting the right person to deal with it. In addition, they were dissatisfied with the length of time taken to deal with their complaint, and reported that staff were rude and unhelpful in a significant proportion of instances. A third of businesses said they would go to Oftel if they were dissatisfied with the way their telecoms supplier had handled their complaint. These are clearly issues that telecoms suppliers need to address in order to satisfactorily deal with a higher proportion of complaints at source and reduce the numbers coming through to Oftel.
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