Chapter 1 Introduction

Chapter 2 Summary

Chapter 3 Main findings

Chapter 4 Switching mobile networks and number portability

Chapter 5 Satisfaction with mobile telecoms service

Chapter 6 Text messaging

Annex 1 Q9 business questions on mobile telephony

1.1 This report provides an overview of the key findings of business behaviour in the mobile telecoms market, taken from the ninth wave of Oftel’s quarterly business survey, conducted in May 2002 amongst 810 UK businesses. The results are subject to an error margin of about 2-4%, this is slightly higher amongst smaller subgroups. Results referred to as 'significantly' different, have been tested at the 95% level of confidence, please see footnote 1 for further sample details.

1.2 Quotas and weighting were applied to small and medium businesses separately so that the sample was representative of SMEs (Small and Medium Enterprises) in the UK in terms of business size, industry sector and region.

1.3 The survey was conducted on behalf of Oftel by Continental Research during May 2002. This report has been prepared by Continental Research based on the results of the survey (footnote 2).

1.4 The report covers:

• number of mobiles used, and mobile telecoms spend;
• service providers and packages used;
• switching network and number portability;
• satisfaction with mobile service;
• text messaging.

• 57% of all businesses have a mobile phone
• £155 spent on mobile services per month by small businesses with mobiles
• £1,295 spent on mobile services per month by medium businesses with mobiles
• equates to £16 per month spent on mobile services per employee amongst all SMEs with mobiles
• 94% satisfied with overall mobile service

2.1 57% of businesses currently own at least one mobile phone, a significant fall on last quarter – we will be investigating this in subsequent surveys. The fall appears to have been driven by small businesses where penetration has fallen from 61% in February to its current 56%.

2.2 Small businesses currently own an average four mobile phones and medium sized businesses own an average 19. These figures are broadly similar to February 2002 where the figures were four and 22 respectively. This stability comes after the number of mobiles per business increased from May 2001 through to February 2002.

2.3 Small businesses are spending £155 per month on average for mobile telecoms services, and medium sized businesses are averaging £1,281 per month, slight rises from February 2002 (£138 and £1581 respectively). Overall amongst UK SMEs average spend is £201 and has remained around this level since August 2001, apart from a slight dip in November (£159).

2.4 34% of businesses have ever switched mobile network/service provider. This is an increase from 29% in February 2002. 39% of those that switched since the introduction of mobile number portability (three years ago) retained all their numbers compared to 75% that switched within the last 12 months indicating a significant improvement in use of number portability over time.

2.5 Currently 94% of UK SMEs are satisfied with their overall mobile service – the same figure as for February 2002. Small businesses are more satisfied than medium businesses with the various cost aspects of mobile services, however small businesses are less satisfied than medium businesses with network coverage, congestion and dropped calls.

2.6 Only 3% of companies have any policy regarding texting employees on company mobiles. Similarly only 3% have negotiated a special deal with their mobile supplier on the cost of text message services.

2.7 97% of businesses are satisfied with the speed and reliability of text message delivery. Satisfaction with the cost of sending a text message at 84% is significantly higher than satisfaction with call costs from a mobile (77%).

3.1 Currently 57% of all UK businesses own at least one mobile phone, this is a significant fall from last quarter. We will be investigating this in subsequent surveys. The fall appears to be mainly driven by small businesses where mobile penetration has fallen from 61% in February to 56% whilst ownership amongst medium businesses has increased from 78% to 87%.

3.2 On average UK small businesses with mobiles currently have four mobile phones while medium sized businesses with mobiles have 19, as shown in the table below. It appears that the number of mobiles per business has stabilised in 2002 after increasing through 2001 from two mobiles per small business and 15 mobiles per medium sized business in May 2001. Spend per mobile is covered later in this section.

3.3 Monthly contract (post-pay) packages remain most popular amongst businesses. Currently almost three-quarters (73%) of UK SMEs with mobiles are using a post-pay package. This figure is unchanged from February 2002.

3.4 Small businesses are more likely to use pre-pay packages (23%) than medium sized businesses (12%). Whilst the proportion of small businesses with a post-pay monthly contract stayed constant at 73%, the equivalent figure for medium businesses fell from 86% in February 2002 to 78% in May 2002. Some totals add to more than 100% as some businesses were using more than one type of package.

3.5 Average monthly spend amongst UK SMEs appears to have stabilised at around £200 following a slight dip in November 2001 (£159), as shown in figure 3d. Small businesses are currently spending £155 per month on mobile services compared to an average £1,295 spent by medium sized businesses.

Figure 3d: Average monthly business spend on mobile telecoms services
Base: UK SME businesses with mobiles, May ’02 (Base: 567), ‘don’t knows’ have been excluded

3.7 Spend varies according to the type of package used, those using pre-pay packages spend on average less than half as much per month (£93) as those using monthly contract packages (£217).

3.8 Figure 3f compares small and medium businesses average spend per phone. Medium businesses still spend more per mobile than small businesses – £68 and £40 respectively. Amongst medium businesses the average monthly spend per mobile fell from £91 in May ’01 and has remained stable at around £70 for the last three quarters.

4.1 Over one third (34%) of all UK businesses with mobile phones have ever switched network, this is an increase from 26% in August 2001 and 29% in February 2002. This growth in the proportion of those ever switching network is caused by the proportion switching network in the last 12 months increasing to 16% (compared with 11% in February 2002). The number switching over a year ago remained steady at 18%.

4.2 It is possible that the increase may be an indication of confusion amongst businesses in relation to switching network and the recent rebranding of O2 (formally BTCellnet) and T-mobile (formally One2One). We will continue to monitor consumers switching behaviour in subsequent quarters.

4.3 Medium sized businesses remain more likely to switch mobile network or service provider than small businesses (45% and 34% respectively). However much of the recent increase in switching network comes from small businesses. In February 2002, 44% of medium and 28% of small businesses had ever switched network.

4.4 Mobile number portability was introduced three years ago. two in five (39%) of those businesses who have switched since then retained all of their numbers. This figure rises amongst those businesses that switched more recently – three-quarters of businesses that switched mobile network or service provider within the last 12 months kept all their numbers.

4.5 Overall, the proportion of businesses retaining all their numbers when switching has increased significantly since August ‘01. There is little difference between the proportion switching and porting in relation to business size – 61% of medium businesses retained their numbers compared to 57% of small businesses.

4.7 The main reasons given by those not retaining all of their numbers when switching since portability became available were the business actually wanting new numbers or being unconcerned about having new numbers.

Chapter 5

Satisfaction with mobile telecoms service

5.1 Figure 5a shows businesses’ satisfaction with a range of aspects of mobile service. Overall satisfaction with mobile telecoms services has remained steady at 94%. Overall satisfaction levels for small and medium businesses are almost identical at 94% and 93% respectively.

5.2 86% of UK businesses with mobiles are satisfied with value for money and 87% are satisfied with their ability to access the network (ie lack of congestion). Fewer (74%) are satisfied with the incidence of dropped calls (ie. being cut off mid-call), and the cost to others calling your mobile (67%). The cost of off-net calls remains the least satisfactory cost aspect of mobile usage amongst businesses with mobiles with 53% satisfied.

6.1 Currently 3% of all SME businesses with mobiles have any policies with regard to sending text messages to communicate with employees on company mobiles. Medium sized businesses are more likely to have a policy regarding texting employees than small businesses – the figures being 11% and 3% respectively.

6.2 About half of these policies discouraged the use of text messages, compared with around a quarter, encouraging texting. Some of the reasons to discourage texting were to save money and time and prevent frivolous usage of text messages.

6.3 3% of all SME businesses with mobiles have negotiated any special deal with their mobile supplier on the cost of text message services, amongst medium businesses the figure is 5% and amongst small businesses 3%.

6.4 As shown in figure 6a there are only very slight differences in attitudes between small and medium businesses with regard to satisfaction with the various aspects of texting.

6.6 The individual measures are not meant to ‘total’ overall satisfaction with text messaging services as there are likely to be many other factors which are not included in this survey which businesses consider important in contributing to their overall satisfaction with their text messaging service.

• Pre-paid (ie after paying a one-off fee for the phone, top up is bought as and when required)
• Monthly subscription contract (ie line rental and call charges are paid each month)
• All in one package (ie line rental paid in advance and calls either billed monthly or paid by call vouchers)

• Overall mobile phone service
• Value for money of overall package
• Overall cost of calls from your mobiles
• Amount it costs for others to call your mobiles
• Network coverage
• Dropped calls ie cut off in middle of call
• Congestion ie ability to access the network
• The cost of calling other mobile networks

• Yes in last 12 months
• Yes 1-3 years ago
• Yes more than three years ago
• No never changed supplier
• Don’t know

• Yes all
• Not all but some
• No none

• Yes
• No
• Don’t know

• Yes
• No
• Don’t know

• Encourage
• Discourage
• Neither
• Other

• Yes
• No
• Don’t know

• The cost of sending a text message
• Overall value for money of text message services
• The speed of text message delivery
• The reliability of text message delivery