Contents

Chapter 1 – Fixed line market

Chapter 2 – Mobile market

Chapter 3 – Internet market

Multiple suppliers

1.1 Currently, 33% of UK SMEs (Small Medium Enterprises) (see note one below) use more than one supplier for their fixed line services. Usage of multiple suppliers increases with business size and fixed spend.

Figure 1a: % UK SMEs currently using more than one fixed supplier
Base: UK SMEs, Feb ‘02 (Base: 801)

1.2 Overall, 94% of SMEs use BT for their fixed telecoms services, there has been little change in this figure in recent quarters. Use of other suppliers as an alternative or in addition to BT is higher in medium businesses (67%) than in small businesses (38%).

Figure 1b: UK SMEs use of fixed telecoms suppliers
Base: UK SMEs, Feb ‘02 (Base: 801)

Average spend

1.3 Average monthly business spend on fixed telecoms amongst all UK SMEs has fallen over £100 since May 2001 (£439 in May ’01, and £318 in Feb ’02). There is no apparent reason for the drop in spending but it may be due to businesses re-evaluating their fixed line services or higher usage of bundled packages.

Figure 1c: Average monthly UK SMEs spend on fixed telecoms services
Base: UK SMEs, Feb ’02 (Base: 801, ‘don’t knows’ have been excluded)

Satisfaction

1.4 Overall, satisfaction with fixed telecoms services has remained fairly constant at around 95%.

1.5 Small businesses are generally more satisfied with the overall service of their fixed line services (95%) than medium sized businesses (88%).

Figure 1d: % UK SMEs satisfied with overall service of their fixed telecoms services
Base: UK SMEs, Feb ’02 (Base: 801, ‘don’t knows’ have been excluded)

Note:

1.SMEs have a minimum annual turnover £50,000: small business - maximum 50 employees, medium business - 51 to 250 employees.

Chapter 2 – Mobile market

Growth and penetration

2.1 62% (see note two below) of SMEs now own at least one mobile phone, broadly similar to recent quarters. Currently, on average small businesses have four mobile phones (two in May '01) while medium businesses have 22 (15 in May '01). While, the proportion of businesses with mobiles appears broadly similar to recent quarters the average number of mobile ownership has risen.

Figure 2a: % UK SMEs with mobiles, by business size
Base: UK SMEs, Feb ’02 (Base: 801)

Packages used

2.2 Almost three-quarters (73%) of SMEs are using monthly contract (post-pay) packages. A significant rise in the proportion of medium sized businesses using post-pay packages (from 77% to 86%), brings use back in line with previous quarters.

Figure 2b: Use of mobile packages by UK businesses
Base: UK SMEs with mobiles, Feb ’02 (Base: 549)

NB: packages used total more than 100% as some businesses are using more than one type of package.

Average spend

2.3 Average monthly spend amongst UK SMEs has risen this quarter to £186 from £159 in November. The rise is driven mainly by medium sized businesses which are currently spending on average £1,581 per month on mobile services compared to £1,358 last quarter.

Figure 2c: Average monthly business spend on mobile telecoms services
Base: UK SMEs with mobiles, Feb ’02 (Base: 549, ‘don’t knows’ have been excluded)

2.4 Spending also varies according to the type of package used. SMEs on pre-pay packages spend around 60% less per month (£85, Feb ’02) than those using monthly contract packages (£216, Feb ’02).

Satisfaction

2.5 Overall satisfaction with mobile services has recovered to 94% following a dip in Nov ’01 (88%). This recovery is driven by small businesses where overall satisfaction has risen from 87% to 94%.

Figure 2d: % UK SMEs satisfied with various aspects of their mobile service
Base: UK SMEs with mobiles, Feb '02 (Base: 549, ‘don’t knows’ have been excluded)

2.6 83% of UK businesses with mobiles are satisfied with value for money and 91% are satisfied with their ability to access the network (ie lack of congestion). Calls to off-net (different networks) mobiles remain the least satisfactory (49%) cost aspect of mobile usage amongst businesses with mobiles.

Note:

2. The apparent drop to 62% is not statistically significant but within the error margins for the survey, and therefore may not be a real drop.

Chapter 3 – Internet market

Penetration and distribution

3.1 The number of SMEs with Internet access remains broadly similar in the last three quarters (see note three below). Currently 6 in 10 (59%) SMEs have Internet access (58% of small businesses and 94% of medium businesses).

Figure 3a: % UK SMEs with Internet access
Base: UK SMEs, Feb ’02 (Base: 801)

3.2 A further 6% of SMEs claim to be in the process of connecting to the Internet.

Access methods and ISPs

3.3 Currently, 67% (Feb ’02) SMEs are connected to the Internet via PSTN/ordinary phone line dial-up services compared to 76% in Nov ’01. This decrease is driven by small businesses – currently 69% use this method of connection compared to 78% in Nov ’01.

3.4 1 in 10 businesses (9%) claim to be accessing the Internet using a broadband connection, either via DSL or cable modem. Industry subscriber figures suggest this is closer to 5%.

Figure 3b: Internet access methods used by UK SMEs
Base: UK SMEs with Internet access, Feb ’02 (Base: 615, ‘don’t knows’ have been excluded)

Note, figures add to more than 100% as some businesses are using more than one access medium.

3.5 Broadband is more likely to be used by medium businesses than small businesses.

Type of package used

3.6 SME’s use of Internet packages remains broadly similar in recent quarters. Almost 4 in 10 (38%) SMEs use unmetered products (33% fully and 5% partially unmetered).

Figure 3c: Main type of Internet package used by UK SMEs
Base: UK SMEs with Internet access, Feb ’02 (Base: 615, ‘don’t knows’ and ‘others’ have been excluded)

3.7 Use of unmetered products increases with the size of business – 51% of medium sized businesses compared to 38% of small businesses use this package.

Satisfaction

3.8 Around 9 in 10 (89%) businesses are satisfied with the overall quality of service, this figure has remained fairly stable over recent quarters. Satisfaction with call charges has also remained stable around 83% in the last four surveys.

Figure 3d: Percentage of UK businesses satisfied with aspects of Internet service
Base: UK SMEs with Internet Feb ‘02 (Base: 615, ‘don’t knows’ have been excluded)

3.9 Although, there is a gradual decline in satisfaction with the speed of access amongst all SMEs (currently, 71%), the level of satisfaction is higher than average in medium businesses (85%). This is consistent with the use of faster access methods such as ISDN preferred by medium businesses.

3.10 All current reports, produced in February 2002 for fixed line, mobile and Internet markets are available on the Internet along with all reports from previous quarters, www.oftel.gov.uk/consumer/research/research_index.htm .

Note:

3. The apparent drop from 63% to 59% is not statistically significant but within the error margins for the survey, and therefore may not be a real drop.