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Q4 February 2001
 Contents
Main Findings -
1. Introduction
1.1 This report
provides an overview of the key findings in the mobile 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:
- Number of mobiles
used, and mobile telecoms spend
- Reasons for not
using mobiles, and barriers to greater use of existing mobiles
- Use of mobile
data services
- Service providers
and packages used
- Satisfaction
with information available/given when selecting mobiles
- Awareness and
use of SIM locking
- Satisfaction
with mobile phone service
- Steps taken to
reduce mobile costs for businesses and their customers
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. The
survey was conducted amongst a representative sample of small and medium
enterprises (SMEs) in the UK, reflecting the UK profile in terms of
business size, sector and region. As small businesses (1-50 employees)
make up around 99% of businesses in the UK, medium businesses were oversampled
in the survey to produce a sufficiently robust sample to allow analysis
of the results among medium businesses. The combined results were re-weighted
to be representative of UK SMEs as a whole (99% small businesses; 1%
medium businesses), consequently the results for small businesses closely
resemble those for SMEs as a whole. The error margin for this survey
of 700 businesses is about 2-4%, though higher amongst small subgroups.
All data shown is weighted data. Unweighted base sizes are shown on
charts and tables to show the number of businesses who were asked the
question.
3.The
report should not be seen as recommended best buys and should not therefore
be relied upon when making purchase decisions. Oftel has conducted its
own checks on the data in this report and whilst we consider it to be
correct, Oftel accepts no liability in respect of any of the results
provided to it by Continental or any decisions taken by any person in
reliance on the report.
2. Summary
Business use
of mobiles
2.1 By February
2001, 69% of small and 90% of medium businesses owned at least one mobile.
Small businesses had an average of 3 mobiles per business, compared
to medium businesses which had an average 17 mobiles per business.
2.2 Lack of need
was the main reason for not using mobiles either because staff were
primarily office based, or didn’t need to be contactable when they left
the office. However, reduced costs was the main factor that would encourage
those businesses with mobiles to make greater use of them.
2.3 There has been
some growth since November 2000 in use of mobile data services such
as Internet and email, each of which are used by about 1 in 10 small
businesses with mobiles, and at least 1 in 5 medium sized businesses.
Overall, 10% of SMEs with mobiles claim to use WAP phones.
Use of choice
in the mobile market
2.4 8 in 10 SMEs
with mobiles were using post-pay packages, and almost 3 in 10 were using
pre-pay packages. Just over a third of businesses had changed the type
of package they used and almost two-thirds had switched tariff. Small
businesses were making as much use of choice as medium businesses in
terms of their propensity to switch tariff and package.
2.5 Just over a
third (36%) of SMEs had changed their mobile network. 42% of businesses
with mobiles were aware of SIM locking (ie that their handsets may be
locked to their current supplier and can only be used with their current
network), and 36% were aware that they might be charged to have their
handsets unlocked. Only 36% of businesses said that the procedures and
possible charges involved in switching supplier had been explained to
them when they bought their mobiles.
Satisfaction
with mobile service
2.6 Overall satisfaction
with mobiles remained relatively high at 90%, slightly lower than in
November, primarily due to a drop in satisfaction with value for money
and call costs.
2.7 Satisfaction
with the cost of calls to mobiles was fairly low (62%) in comparison
with other aspects of service, and 1 in 5 businesses had taken steps
to reduce in-house costs of calling staff on their mobiles. Significantly
higher proportions had introduced measures to reduce the cost to customers
who call the business on its mobile numbers.
2.8 Despite relatively
high levels of satisfaction with the range and quality of information
available to assist businesses choose their mobiles (83%), fewer than
half of businesses (47%) said they found it easy to compare the prices
and packages offered by different mobile service providers. On average,
only half of businesses said that the price of calls when abroad, and
to other mobile networks, had been explained to them when they bought
their mobiles.
Main Findings
3. Business use
of mobile telephony
Ownership
of mobiles
3.1 By February
2001, 69% of small businesses and 90% of medium businesses owned at
least one mobile phone, a rise amongst both groups since November (from
54% and 84% respectively). Small businesses had an average 3 mobiles,
compared to an average 17 amongst medium sized businesses. Average number
of mobiles per business compared with number of employees is shown in
figure 3a.
Figure 3a Average
number of mobiles owned, by business size
Base: UK SME businesses, Feb ’01 (Small: Base – 400, Medium: Base –
300, 1-2% ‘don’t knows’ have been excluded)
3.2 Lack of need
was the main reason given for not using mobiles, either because employees
were primarily office based, or it was not considered important that
people could contact them when they left the office. A quarter of small
businesses who don’t own their own mobiles said this was because staff
used their own personal mobiles, taking this into account increases
mobile use to 76% of small businesses.
Figure 3b Reasons
for business not owning mobiles
Base: UK SME businesses who don’t own mobiles, Feb ’01 (Base – 132)
Use of mobile
data services
3.3 Figure 3c shows
the proportion of businesses using mobile data services such as Internet,
email, WAP phones, and text messaging. There has been growth in business
use of all these services during the past six months, in particular
email, Internet and WAP – each currently used by 1 in 10 small businesses
and at least 1 in 7 medium sized businesses.
Figure 3c %
UK SME business using mobile data services
Base: UK SME businesses with mobiles, Feb ’01 (Small: Base – 295, Medium:
Base – 273)
Business spend
on mobile telecoms
3.4 The average
monthly spend on mobile telecoms services by small businesses was £170
and £1769 by medium sized businesses. This compares with spends of £337
and £3961 respectively on fixed telecoms services. Average monthly mobile
spends across different types of businesses is shown in figure 3d. Data
has been combined from the November and February surveys for individual
business types, to provide more robust sample sizes on which to base
conclusions.
Figure 3d Average
monthly business spend on mobile telecoms services by sector.
Base: UK SME businesses with mobiles, Feb ’01 (Total base – 568, ‘don’t
knows’ have been excluded)
* Caution should
be applied as combined base size less than 100
Factors that
would encourage greater use of mobiles
3.5 Businesses with
mobiles were asked what factors would encourage them to make greater
use of their mobiles. Cheaper costs was the main factor including call,
subscription and handset charges. Almost 3 in 10 businesses with mobiles
were unlikely to make greater use of their mobiles.
Figure 3e Factors
that would encourage greater mobile use (unprompted)
Base: UK SME businesses with mobiles, Feb '01 (Small: Base - 295, Medium:
Base - 273)
4. Use of mobile
packages and service providers
Use of service
providers and mobile packages
4.1 The survey found
32% of SMEs using Cellnet, 31% using Vodafone, 29% using Orange, and
11% using One2One – all broadly in line with previous quarters. In addition
to these main suppliers, 8% were using a range of service providers.
There was little difference between small and medium sized businesses
in their choice of networks apart from Vodafone which was used by slightly
more medium sized businesses.
4.2 8 in 10 SMEs
with mobiles were using post-pay monthly subscription packages – a slight
rise since November 2000 (69%), and almost 3 in 10 (28%) were using
pre-pay packages (‘all in one’, and ‘pay as you go’ - slightly lower
than in November 35%). This adds to more than 100% as some businesses
were using more than one type of package. There was little difference
between small and medium sized businesses as seen in figure 4a.
Figure 4a Use
of mobile packages by UK SME businesses
Base: UK SME businesses
with mobiles, Feb ’01 (Small: Base – 295, Medium: Base – 273)
* NB packages
used total more than 100% as some businesses using more than one type
of package
4.3 Just over a
third of businesses said they had changed their mobile network/service
provider. A similar proportion had changed the type of package they
used and almost two-thirds had changed to a different tariff. Although
small businesses were less likely to have changed network, they were
making as much use of choice as medium businesses in terms of their
propensity to switch tariff and package. This can be seen in figure
4b.
Figure 4b %
UK SMEs switching service provider, package, and tariff.
Base: UK SME businesses with mobiles, Feb ’01 (Small: Base – 295, Medium:
Base – 273)
4.4 Previous surveys
reported that better network coverage and quality of service was the
main reason for switching mobile network / service provider, in additional
to better customer service and support, and cheaper subscription and
call costs. Satisfaction with current supplier was the most common reason
for not switching network / service provider, which is similar to other
markets including fixed telecoms and Internet provision.
Businesses’
experience of the processes involved in switching
4.5 The November
survey found that 52% of businesses who had switched network / service
provider kept their original mobile numbers when they changed. A quarter
of businesses who changed their numbers said they would liked to have
kept the same numbers but were told that it wasn’t possible, and a further
7% said they would have been charged too much to keep their original
numbers.
4.6 Just over a
third (36%) of businesses said that the procedures and possible charges
involved in switching supplier had been explained to them when they
bought their mobiles. Over half of businesses (53%) said this information
had not been explained to them, and a small proportion weren’t sure
(11%).
4.7 In line with
this, less than half of businesses (42%) were aware of SIM locking (ie
that their handsets may be locked to their current supplier). 36% of
businesses were aware that they might be charged to have their handsets
unlocked to enable them to use a different network. The results are
summarised in figure 4c.
Figure 4c Awareness
of SIM locking and possible charges for unlocking.
Base: UK SME businesses with mobiles, Feb ’01 (Small: Base – 295, Medium:
Base – 273)
4.8 Awareness of
locking and potential charges for unlocking was higher amongst medium
than small businesses, also amongst post than pre-pay customers, and
unsurprisingly amongst those who had switched network. However, half
of businesses who had switched network were still unaware of SIM locking
and possible charges.
4.9 1 in 10 businesses
who were aware of SIM locking said they had tried to have their handsets
unlocked in order to use them on a different network (this equates to
about 4% of all SME businesses with mobiles). Two thirds said they had
been successful and a third were unsuccessful – the main reason for
this was the cost involved.
5. Satisfaction
with information and advice in the mobile market
5.1 Despite relatively
low awareness of SIM locking and advice on different call charges, 83%
of SME businesses said they were satisfied with the range and quality
of information available to assist their business choose a mobile network
and package best suited to its needs. There was little difference between
small and medium businesses, or between those who had and had not switched
their network or package. Satisfaction was slightly higher however amongst
those using post-pay packages (85%) than pre-pay (71%).
5.2 Businesses who
were not satisfied with the range and quality of information on offer
were considerably less satisfied with their mobile package overall (67%)
compared with those who were satisfied with the available information
(94%).
5.3 Despite high
levels of satisfaction with the range and quality of information, fewer
than half of businesses (47%) said they found it easy to compare the
prices and packages offered by different mobile service providers. There
was little difference between small (46%) and medium (51%) businesses.
5.4 Ease of comparing
prices and packages was lower amongst businesses who had switched tariff
(and therefore are more likely to have gone through a comparison process)
at 42% compared with those who had not changed (55% of whom said comparisons
were easy). 94% of businesses who said it was easy to compare prices,
were satisfied with the overall value for money of their mobile package.
This satisfaction with value for money fell to 59% amongst businesses
who found it difficult to compare offers.
5.5 Businesses were
asked whether the price of calls to other mobile networks, and the price
of calls whilst abroad had been explained to them when they purchased
their mobiles. Just over half (56%) of businesses said that the price
of calls to other mobile networks had been explained to them and just
less than half (45%) had been advised on the price of calls whilst abroad.
Higher proportions of medium businesses and those using post-pay packages
had been given this information.
6. Satisfaction
with mobile telecoms service
6.1 Overall satisfaction
with mobile telephony services remains relatively high amongst UK SME
businesses at 90%, although this has experienced a small (but not significant)
decline since November and is not quite as high as business satisfaction
with fixed telecoms services (93%).
6.2 Accuracy of
billing and network coverage remain the most satisfactory aspects of
service. Satisfaction with value for money experienced quite a significant
drop between November 2000 and February 2001, apparently driven by a
drop in satisfaction with call costs rather than a perceived decline
in coverage or quality of service, primarily amongst those on monthly
subscription packages.
6.3 Satisfaction
with overall value for money and call costs have both returned to similar
levels reported in August 2000, indicating that whatever the cause of
this rise in satisfaction in November 2000, it has not been sustained.
This previous rise and subsequent fall in satisfaction may be the result
of minor sampling variation but it coincides with the recent stabilisation
in prices for heavier usage customers on monthly subscription packages,
following continual price reductions over previous months since Oftel’s
monitoring of prices began in January 1999.
Figure 6a %
UK SME businesses satisfied with various aspects of their mobile telecoms
service
Base: UK SME businesses with mobiles, Feb ’01 (Small: Base – 295, Medium:
Base – 273, ‘don’t knows’ have been excluded)
* NB Caution
should be applied as base size less than 100
6.4 There was little
difference in overall satisfaction between businesses who had and had
not switched supplier or package. Satisfaction with both calls and overall
value for money was lower amongst those who had switched tariff. This
does not necessarily imply that switching has resulted in a worse deal,
but may reflect higher expectations of those who have switched. Similar
findings have been reported in the fixed telecoms market. However, if
this was the case, we could expect satisfaction with dropped calls,
congestion, and customer service also to be lower amongst those who
had switched, but it was in fact higher. This is in line with earlier
findings that quality and coverage were the main reasons for switching
and perhaps indicates that at least some businesses are prepared to
switch to more expensive packages which they perceive to offer a better
quality service.
6.5 Satisfaction
with price of calls to mobiles (wherever the call is being made from)
was fairly low (at 62%) in comparison to other aspects of mobile service.
60% of small businesses and 68% of medium businesses said it was important
for their customers to be able to call them on their mobile numbers.
This was highest in the transport, communications, and construction
business sectors. Given the increasing use of mobiles as a means of
contacting businesses, and the relatively low satisfaction with the
cost of doing so, businesses were asked what steps they had taken, or
would consider taking to reduce the costs of calling mobiles, for both
themselves and their customers.
6.6 As seen in figure
6b, 1 in 5 businesses had taken any steps to reduce their in-house costs
of calling their mobiles, and medium sized businesses (who generally
have more mobiles and higher fixed line and mobile bills) were making
more attempts (29%) to reduce these costs than small businesses (19%
had taken steps).
6.7 Considerably
more businesses however, said they had taken steps to reduce the costs
to their customers when contacting the business on its mobiles (figure
6c), and this was higher still amongst those who considered it important
that their customers contact the business on its mobile numbers.
Figure 6b %
UK SME businesses who have taken, or would consider taking steps to
reduce the cost of calls to mobiles either for themselves
Base: UK SME businesses with mobiles, Feb ’01 (Small: Base – 295, Medium:
Base – 273)
Figure 6c %
UK SME businesses who have taken, or would consider taking steps to
reduce the cost of calls to mobiles for their customers
Base: UK SME businesses
with mobiles, Feb ’01 (Small: Base – 295, Medium: Base – 273)
7. Conclusions
7.1 Use of mobiles
amongst both small and medium businesses continues to grow, as does
use of mobile data services (albeit to a lesser extent), and there appeared
to be no significant barriers to take up amongst non-users. Lack of
need was the main reason for not using mobiles. Unlike the fixed telephony
market where medium businesses are still making greater use of competition
than small businesses, in the mobile market small businesses were making
as much use of choices as medium businesses, in terms of their propensity
to switch package and tariff. They were less likely to have switched
network however, tended to be less aware of issues such as SIM locking,
and were slightly less satisfied with the overall value for money of
their mobile service than medium businesses. Overall use of competition
(in terms of the proportion of businesses switching supplier) remains
consistently higher in the mobile market, than in the fixed telecoms
and Internet markets.
7.2 The high level
of satisfaction expressed over the range and quality of information
available to assist businesses select their mobile could possibly be
misleading. It is contradicted by fairly low levels of awareness of
SIM locking, advice on roaming and off-net call costs, and significant
proportions expressing difficulty in comparing prices and packages of
different suppliers.
7.3 Overall satisfaction
with mobile service remains high at 90%, but value for money experienced
quite a significant fall driven by a drop in satisfaction with call
costs rather than coverage or quality of service. Satisfaction with
overall value for money and call costs both returned to similar levels
reported in August 2000, indicating that whatever the cause of this
rise in satisfaction in November 2000, it has not been sustained.
7.4 There was little
difference in overall satisfaction between businesses who had and had
not switched supplier or package. However, satisfaction with both calls
and overall value for money was lower amongst those who had switched
tariff. This does not necessarily imply that switching results in a
worse deal, but may reflect higher expectations of those who have switched.
However, satisfaction with the level of dropped calls, congestion, and
customer service was slightly higher amongst those who had switched
network, supporting previous findings which indicated these were the
main reasons for switching. It might reasonably be concluded therefore
that some businesses are switching for quality reasons and are not making
financial savings as a result of their switch. Indeed they might be
paying slightly higher costs in exchange for what they perceive to be
a better quality service.
7.5 Price of calls
to mobiles remains a concern for businesses and whilst few businesses
had introduced measures to reduce the costs to themselves, significantly
higher proportions had taken steps towards reducing the cost to customers.
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