Contents

Chapter 1 – Introduction

Chapter 2 – Summary

Chapter 3 – Ownership of mobiles and packages used

Chapter 4 – Satisfaction with mobile telecoms service

Chapter 5 – SIM swapping and handset unlocking

Annex A – Q12 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 twelfth wave of Oftel’s quarterly business survey, conducted in February 2003 amongst 827 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 waves (November 2002 and February 2003), combined data have been used.

1.4 The survey was conducted on behalf of Oftel by Continental Research during February 2003. 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; and
• usage of handsets with different networks (SIM swapping and handset unlocking).

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 827 businesses is about 2-4%, but is higher amongst smaller 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

• 59% of all businesses have a mobile phone;
• Monthly contracts are the most popular payment option (82%);
• 95% satisfied with overall mobile service;
• 85% satisfied with cost and value for money;
• 61% aware of SIM swapping; and
• 24% have either switched networks and kept their handsets or use multiple networks on the same handset by alternating SIM cards.

Mobile ownership remains steady at 59%

2.1 59% of businesses currently own at least one mobile phone, ranging from 58% among small to 79% among medium. This is not significantly different to the figure from Nov ’02 and is in line with figures over the past year.

Use of contract packages has grown over the last year, driven by small businesses switching away from prepay packages

2.2 Last quarter saw use of contract packages continue to increase. Usage is now at 82% of SMEs with mobiles, a significant rise from 73% this time last year. This has been accompanied by a subsequent drop in use of pay-as-you-go packages. This trend has been driven by small businesses converting from pre-pay to post-pay packages.

Satisfaction with overall mobile service, cost and value for money all remain stable

2.3 Satisfaction with overall mobile service has not changed since the last quarter and stands at 95%. Satisfaction with overall value for money and the cost of the service have also remained stable at 85%.

2.4 Small businesses show higher levels of satisfaction than medium businesses, particularly with overall cost and value for money.

2.5 Pre-pay business mobile customers remain significantly more satisfied with overall service and value for money compared to post-pay customers.

61% aware of 'SIM swapping'

2.6 61% of SMEs with mobiles are aware of the ability to swap SIMs between handsets, with higher awareness amongst medium businesses (70%) than small businesses (60%).

2.7 Amongst those businesses that are aware they could use their phone on different networks but have never done so, over 4 in 10 (43%) are aware they may need to get their handsets unlocked. Three-quarters of these (76%) are aware their provider may charge to unlock the handset.

2.8 In summary 24% of SMEs with mobiles have either switched networks and kept their handsets or use multiple networks on the same handset by alternating SIM cards. An additional 26% are interested in one or both of these options and half are not interested in either option.

2.9 The proportion of businesses with mobiles that have switched network and kept their handsets (18%) is higher than the proportion that currently use multiple networks by on the same handset by alternating SIM cards (9%). Interest is marginally, but not significantly higher in switching networks and keeping handsets (25%) than in multi-network use (20%).

Chapter 3

Ownership of mobiles and packages used

Ownership of mobiles

3.1 Currently 59% of all UK businesses own at least one mobile phone. This is not a statistically significant change from Nov ’02, and in fact has remained largely stable over the past year. Penetration amongst medium and small businesses has remained stable at about 80% and 60% respectively.

Figure 3a: % UK SME businesses with mobiles
Base: UK SMEs, Nov ’02/ Feb ‘03 (Base: small – 1,066, medium – 607)

Mobile packages

3.2 Monthly contract (post-pay) packages remain most popular amongst businesses. Currently 4 out of 5 (82%) UK SMEs with mobiles are using a post-pay package. This is a significant increase from 75% six months ago, and the figure has been steadily rising during the last year, accompanied by a subsequent drop in use of pay as you go packages. This trend has been driven by small businesses and, as the overall level of packages used has been fairly stable, indicates that small businesses have been converting from pre-pay to post-pay packages.

3.3 Small businesses remain more likely to use pre-pay packages (17%) than medium sized businesses (8%).

Figure 3b: Use of mobile packages by UK SME businesses
Base: UK SMEs with mobiles, Nov ‘02/ Feb ‘03 (Base: small – 641, 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 all levels remain stable since last quarter. Overall satisfaction with mobile telecoms service recovered to 95% last quarter following a slight dip in August ’02, and has maintained this level in February ‘03.

4.2 Satisfaction with overall value for money and cost of service has not changed significantly since the last quarter, both at 85%.

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

* not asked for this respective quarter

4.3 Small businesses continue to be more satisfied than medium businesses (see figure 4b), particularly with issues relating to cost.

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 Pre-pay business mobile customers are more satisfied with these aspects of their mobile service compared to post-pay customers (see figure 4c), as was observed in previous quarters. The biggest disparity in satisfaction can be seen with respect to value for money, with 94% of pre-paid customers satisfied, compared to 84% of monthly customers, and just 71% of those on an all-in-one package

Figure 4c: % UK SME businesses satisfied with various aspects of their mobile service
Base: UK SME businesses with mobiles, ‘don’t knows’ have been excluded

4.5 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.

Notes:

3. Combined data from two quarters - see 1.3
4. Before August 2002 'Geographic coverage' was worded in the questionnaire as 'Network coverage'.
5. 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

SIM swapping and handset unlocking

5.1 Mobile handsets contain a SIM card, which is fixed to a specific mobile network. In order to use a mobile handset on a different network it is necessary to use a different SIM card in that phone. This has two main applications:

• If a handset and SIM card are provided by one network, it is possible to switch to a new network but still use the same handset by using a new SIM card from the new network.
  
• It is also possible to use the same handset on several different networks by alternating the SIM card to the appropriate one for whichever network needs to be used.

5.2 Overall, 61% of SMEs with mobiles are aware of this 'SIM swapping' ability, with higher awareness amongst medium businesses (70%) than small businesses (60%). Awareness has not changed significantly since November 2001, when it stood at 66%.

Unlocking handsets

5.3 Mobile phone handsets may be 'locked' to the network that they were provided by, meaning that to use them with different networks they have to be unlocked. Amongst those businesses that are aware they could use their phone on different networks but have never done so, just over 4 in 10 (43%) are aware they may need to get their handsets unlocked. Three-quarters of these (76%) are aware their provider may charge to unlock the handset.

5.4 Medium sized businesses were significantly more likely to be aware (58%) of handset unlocking than small businesses (43%). 

Figure 5a: Awareness and use of SIM swapping by SMEs
Base: UK SMEs with mobile phones, Feb ’03 (Base: 567)

Switching networks but keeping handsets

5.5 Nearly a third (30%) of those SMEs aware of SIM swapping have previously switched networks but kept the same handsets, with 17% stating it was for all their phones.

Figure 5b % SMEs ever switching networks but keeping the handsets
Base: UK SMEs aware of SIM swapping, Feb ‘03 (Base: 379)

5.6 Amongst those that have never switched mobile networks and kept the same handsets, a quarter are interested in doing so in the future (see figure 5c). There was no significant difference in interest according to awareness of the ability to swap SIMs.

Figure 5c: SME’s Interest in switching networks but keeping handsets
Base: UK SMEs never having switched networks but kept handsets, Feb ‘03 (Base: 435)

5.7 Overall this equates to 18% of businesses with mobiles who have switched network and kept the same handset and a further 21% are interested in doing so. A quarter (27%) of medium sized businesses claimed to have switched networks and kept handsets and a further quarter (24%) were interested. Small businesses were less likely to have done so (18%) and fewer were interested.

5.8 The proportion of SMEs who had switched network and kept at least some of their original handsets has not changed significantly since November 2001 (15%). Interest in doing so has fallen from 27% in November 2001 to 21% this quarter.

Using multiple networks on the same handset

5.9 Amongst the SMEs that are aware of SIM swapping, 14% currently use more than one network by alternating the SIM cards used in the handset; 6% do so for all their phones, 8% do it in some or most of them (see figure 5d). 

Figure 5d % SMEs currently using more than one network by using different SIMs in its mobile handsets
Base: UK SMEs aware of SIM swapping Feb ‘03 (Base: 379)

5.10 Amongst those SMEs that don’t use more than one network for their mobile handsets by alternating SIMs, a total of 80% are not interested – (26% stating "not very" interested, and 54% stating 'not at all' interested), interest was lower amongst small businesses (see figure 5e). Businesses previously aware of SIM swapping might be in a better position to judge whether or not it would be of use to their business, however, these businesses were more likely to say they were not interested than those previously unaware.

Figure 5e: SME’s Interest in using more than one network with its mobile phones
Base: UK SMEs not using more than one network with its mobile phones, Feb ‘03 (Base: 522)

5.11 Overall this equates to 9% of businesses with mobiles who currently use more than one network by alternating SIM cards in their handsets and a further 18% are interested in doing so. There is no significant difference in likelihood to alternate SIMs according to business size.

5.12 There has been a significant increase in the proportion of SMEs with mobiles alternating SIMS from 4% in November 2001 to 9% in February 2003. Interest amongst those not using has fallen from 24% to 18% over the same period.

5.13 Interest is marginally, though not significantly, higher in switching networks and keeping handsets (25%) than in multi-network use (20%).

5.14 As shown in figure 5f, overall a quarter (24%) of SMEs with mobiles have either switched networks and kept their handsets or use multiple networks on the same handset by alternating SIM cards. A further quarter are interested in taking advantage of one of these options. The remaining half are not interested in either option.

Figure 5f: Use and interest amongst SMEs in using a particular SIM swapping 'facility'
Base: UK SMEs with mobile phones, Feb ‘03 (Base: 379, don’t knows have been excluded)

Q12 business questions on Mobile

Q1 Base: All respondents
And now thinking about mobile phones. Does your company own any mobile phones which are currently connected to a network?

Yes
No
Don't know

Q2 Base: All with mobiles currently connected to a network
Which of the following best describes the mobile phone packages your company uses?

Pre-paid package (i.e. after paying a one-off fee for the phone top up is bought as and when required)
Monthly subscription contract (i.e. line rental and call charges are paid each month)
All in one package (i.e. phone and any line rental paid in advance and calls either billed monthly or paid by call vouchers)
Other (specify)
Don't know

Q3 Base: All with mobiles currently connected to a network
Are you satisfied with the mobile phone service and service supplier you use on the following attributes? Firstly

Overall mobile phone service
Overall cost of your service
Value for money of overall package

Q4 Base: All with mobiles currently connected to a network
Mobile handsets contain a SIM card, which can be changed to enable you to use your phone with additional or alternative networks. Before now, were you aware that your company could use its mobiles in this way?

Yes
No
Don't know

Q5 Base: All aware of ability to use SIM from different networks in the same phone
Does your company use more than one network by using more than one SIM card in the same phone? IF YES, Is that for all of your phones, most of your phones, or some of your phones?

Yes - all
Yes - most
Yes - some
No
Don't know

Q6 Base: all with mobiles currently connected to a network
Has your company ever switched mobile networks, but kept the same mobile phone handsets? IF YES, Is that for all of your phones, most of your phones, or some of your phones?

Yes - all
Yes - most
Yes - some
No
Don't know

Q7 Base: All with mobile phones but do not use different SIMs in the same network
How interested would your company be in using more than one network with its mobile phones? Would your company be…

Very interested
Fairly interested
Not very interested
Not at all interested
Don't know

Q8 Base: All with mobile phones but have never switched networks and kept the same handsets.
And how interested would your company be in switching to a different network but keeping the same handsets? Would your company be…

Very interested
Fairly interested
Not very interested
Not at all interested
Don't know

Q9 Base: All aware of ability to use different networks but never having done so
Your company's mobile phone handsets may be locked to your provider(s), meaning that to use different networks you may have to ask your provider to unlock them. Before now were you aware of this?

Yes
No
Don't know

Q10 Base: All aware that they may have to ask their provider to unlock the handsets
Your provider may charge your company for this. Before now, were you aware of this?

Yes
No
Don't know