Contents

Chapter 1 – Introduction

Chapter 2 – Summary

Chapter 3 – Main findings

Chapter 4 – Satisfaction with mobile telecoms service

Chapter 5 – Using mobile phones abroad

Annex A – Q11 business questions on mobile telephony

 Chapter 1

Introduction

1.1 This report provides an overview of the key findings of business behaviour in the mobile telecoms market, taken from the eleventh wave of Oftel’s quarterly business survey, conducted in August November 2002 amongst 831 846 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 for further sample details (see note one below).

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 In some cases throughout the report, data on a rolling basis is shown. This combining of two periods increases the sample size and allows trends in the data to be analysed and interpreted with greater confidence. For example, where identical questions have been asked over the past two two waves (and August and November 2002), combined data have been used.

1.4 The survey was conducted on behalf of Oftel by Continental Research during August November 2002. This report has been prepared by Continental Research based on the results of the survey (see note two below).

1.5 The report covers:

• type of mobile package used;
• satisfaction with mobile service;
• importance of various aspects of mobile service; and
• use of mobiles abroad.

1.6 A copy of the questions is attached in Annex A. Topics to be researched each quarter are requested by Oftel project teams, and results feed into current investigations and reviews in individual market areas.

Notes:

1.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 97% of businesses in the UK, medium businesses (51-250 employees) were over-sampled 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 (97% small businesses; 3% medium businesses), consequently the results for small businesses closely resemble those for SMEs as a whole. The error margin for this survey of 846 businesses is about 2-4%, but is higher amongst small subgroups. Results referred to as 'significantly' different, have been tested at the 95% level of confidence and hence are outside of the error margins and therefore can be considered real changes. 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.

2.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.

 Chapter 2

Summary findings

Headline figures

• 61% of all businesses have a mobile phone;
• 60% of businesses with mobiles use their mobiles abroad; and
• 95% satisfied with overall mobile service.

Mobile ownership remains steady at 61%, but significant shift towards use of contract packages

2.1 61% of businesses currently own at least one mobile phone. This is identical to the figure from May/ Aug ’02 and is in line with figures over the last year. Use of contract packages has increased to 79% from 75% last quarter and has been rising steadily over the past 12 months.

Satisfaction with overall mobile service recovers to 95%

2.2 Satisfaction with overall mobile service has recovered to 95%. Satisfaction with overall value for money and geographic coverage also recovered this quarter. These increases restore satisfaction levels to a similar level to those observed throughout the past year.

2.3 The aspects of mobile service with the lowest satisfaction levels are off-net call costs (53%) and the cost of using mobiles abroad (45%).

Most important aspects of mobile service are quality of connection/ coverage, cost and customer service/ aftersales care

2.4 The most important aspect of mobile service amongst UK SMEs is the ability to

make calls without being cut off (97%). Other important aspects are the overall cost of the service (93%), geographic coverage (88%), and the quality of customer service/ aftersales care (88%). Satisfaction with each of these aspects (bar aftersales care – not asked) stands above 80%.

Lower roaming charges would potentially increase a third of business use of mobiles abroad – particularly amongst small businesses

2.5 3 in 5 (59%) businesses have ever used their mobile abroad, unchanged since May ’02. Use of mobiles abroad is higher amongst medium businesses (74%) than small businesses (59%).

2.6 2 in 5 businesses that have ever used their mobile abroad said that price changes would not affect their international use of mobiles. However, just over a third (36%) claimed they would use their work mobiles abroad more frequently if prices fell, and a quarter would reduce this use if prices rose. Small businesses appear more price sensitive to the cost of using their mobile when abroad. 36% of small businesses using their mobile phone abroad would increase the amount they used their mobiles abroad if costs fell, compared to 23% of medium businesses.

 Chapter 3

Main findings

Business use of mobile telephony

Ownership of mobiles

3.1 Currently 61% of all UK businesses own at least one mobile phone. The latest figures show a recovery following a slight drop in May. This is unchanged from May-August 2002.

Figure 3a: % UK SME businesses with mobiles

Base: UK SMEs, Aug/ Nov ’02 (Base: small - 1060, medium - 617)

Mobile packages

3.2 Monthly contract (post-pay) packages remain most popular amongst businesses. Currently 4 out of 5 (79%) UK SMEs with mobiles are using a post-pay package. This is a significant increase from 75% in May-August 2002 and has been rising steadily over the last year.

3.3 Small businesses remain more likely to use pre-pay packages (19%) than medium sized businesses (8%).

Figure 3b: Use of mobile packages by UK SME businesses

Base: UK SMEs with mobiles, Aug/ Nov ‘02 (Base: small – 662, medium – 484)

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

Chapter 4

Satisfaction with mobile telecoms service

4.1 Figure 4a shows businesses’ satisfaction with a range of aspects of mobile service. Overall satisfaction with mobile telecoms service recovered to 95% this quarter following a slight dip in August ‘02. The increase was driven by small businesses where satisfaction grew from 89% to 95%.

4.2 Satisfaction with overall value for money and geographic coverage also recovered to 85% and 84% respectively. Satisfaction with off net calls remains significantly lower than most aspects of mobile service standing at 53% this quarter.

Figure 4a: % UK SME businesses satisfied with various aspects of their mobile service

Base: UK SME businesses with mobiles, ‘don’t knows’ have been excluded

4.3 Small businesses are more satisfied with aspects related to cost (overall value for money, off-net call costs, overall cost of your service) than medium businesses (see figure 4b). This reverses the situation observed in May 2002 when small business where less satisfied than medium businesses with aspects related to cost, but is in line with historic data. 

Figure 4b: % UK SME businesses satisfied with various aspects of their mobile service

Base: UK SME businesses with mobiles, ‘don’t knows’ have been excluded

4.4 Other aspects of mobile service with which satisfaction was explored this quarter were the overall cost of the service (84%), the choice of services available (95%) and the choice of packages and tariffs available (85%). Satisfaction with each of these aspects compared to their relative importance to businesses is explored in the next section.

4.5 Generally pre-pay business mobile customers are more satisfied with the various aspects of their mobile service compared to post pay customers, with the exception of satisfaction with the choice of services available and price of off-net calls.

4.6 The individual measures are not meant to ‘total’ overall satisfaction 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 mobile service.

Importance of aspects of mobile services to UK businesses

4.7 Looking at the importance of various factors in figure 4c below helps put the satisfaction levels detailed in the previous two charts (4a and 4b) into context.

Figure 4c: Importance of various aspects of mobile service to UK SME businesses

Base: UK SME businesses with mobiles, Nov ‘02 (558)

4.8 The most important aspects of mobile service to businesses relate to the ability to make calls without being cut off, geographic coverage, aspects related to costs and the quality of customer service/ aftersales care. The choice of handsets and services available are relatively less important. Small and medium businesses give very similar importance ratings for the aspects of mobile service detailed above.

4.9 The most noticeable disparity between perceived importance and satisfaction is for the cost of calling other mobile networks. Just over half (53%) are satisfied with this, yet 85% state this is important, with half stating it is very important. Conversely, Choice of services has very high satisfaction (95%), yet only 13% state this as very important.

Notes:

3.Before August 2002 'Geographic coverage' was worded in the questionnaire as 'Network coverage'.

4.Before August 2002 'Ability to make calls without being cut off' was worded in the questionnaire as 'Dropped calls i.e. ability to make calls without being cut off'.

Chapter 5

Using mobile phones abroad

5.1 Overall 3 in 5 UK businesses use their mobile phone whilst abroad, unchanged since May ‘02. Frequency of use also remains broadly similar. Medium businesses remain more likely to use their mobiles abroad (74%) than small businesses (58%).

Figure 5a: % UK SME businesses with mobile phones currently connected to a network,

Base: All SMEs with mobiles, Nov ’02 (Base: 588, small: 325, medium: 233)

NB. Totals may add to 101% or 99% due to rounding

5.2 Amongst those with mobile phones used abroad for work purposes 64% were aware that they were charged for receiving incoming calls when abroad, 13% thought they were not charged and 23% did not know. The figures are similar for small and medium businesses.

5.3 Satisfaction with the overall cost of calls abroad stands at 45%. Overall satisfaction with the cost of calls abroad was lower than average (29%) amongst those aware that they are charged for receiving incoming calls whilst abroad.

Price sensitivity when using mobile phone abroad

5.4 2 in 5 (41%) businesses said they would not change their current use of mobiles abroad regardless of whether roaming charges rose or fell. This was highest amongst those businesses that rarely use their mobiles abroad (48%).

5.5 A quarter (24%) claimed they would reduce their frequency of use abroad if costs rose, this was largely businesses who sometimes use their mobiles abroad (35%). In comparison, lower roaming charges could potentially result in just over a third (36%) of businesses using mobiles abroad more frequently. This was more evident amongst small (36%), than medium businesses (23%). Overall, half of businesses claimed they would alter their frequency of roaming if charges changed.

Figure 5b: Impact of cost on future usage of mobile phones abroad

Base: SMEs with mobile phones used abroad for work purposes, Nov ‘02

* responses are not mutually exclusive hence summary does not total sum of these responses

Q11 business questions on mobile telephony

Q1 Does your company own any mobile phones which are currently connected to a network?

Q2 Which of the following best describes the mobile phone packages your company uses?

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)

Q3 Are you satisfied with the mobile phone service and service supplier you use on the following attributes?

Overall mobile phone service
Overall cost of your service
Value for money of overall package
Choice of packages and tariffs available
Choice of services available for example Internet text messaging and voicemail
Geographic coverage
The cost of calling other mobile networks
Ability to make calls without getting cut off
Cost of using your mobiles abroad

Q4 Thinking about your company's mobile service overall and what's important to your company and what's not, how important do you consider each of the following aspects of your mobile service?

Choice of packages and tariffs available
Choice of services available for example Internet text messaging and voicemail
Quality of customer service/ after sales care
Ability to make calls without getting cut off
Overall cost of your service
The cost of calling other mobile networks
Choice of handsets available
Geographic coverage
Cost of using your mobiles abroad
Quality of using your mobiles abroad

Q5 How often, if at all, are your company's mobile phones used abroad for work purposes?

Frequently
Sometimes
Rarely
Never
Don't know

Q6 When used abroad, is your business charged for receiving incoming calls to any of its mobiles?

Yes - business is charged
No - business is not charged
Don't know

Q7 Thinking about your company's current use of its mobiles abroad, and the amount it costs, which of the following best describes your companies situation on its future use of mobiles abroad?

We would not change the amount we use our mobiles abroad regardless of costs
We would reduce the amount we use our mobiles abroad if costs rise
We would increase the amount we use our mobiles abroad if costs fall
Don’t know/ None of these