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09 Rhagfyr 2009

09 December 2009

Telecommunications services are becoming more important to UK businesses, new Ofcom research revealed today, with communicating on the move vital for many firms. Ofcom's first comprehensive research into how UK businesses use telecoms services explores take-up, use of services and views about landline, mobile and internet services.

Businesses spent 13.9billion on telecoms services in 2008, accounting for 45 per cent of total retail telecoms turnover. For businesses with five employees or more, the mean annual spend on telecoms services per year is 14,600 which is 19 times more than the average household.

The mix of services being used by business is changing over time, with mobile, internet and data services becoming increasingly important. More than 85 per cent of businesses were satisfied with the range of products and services available across all telecoms markets.

The research shows how businesses are an important part of the telecoms market and telecoms services are playing an increasingly key role in the success of UK businesses. However the research also shows that they could be getting more from their communications service.

The research highlights three main areas of concern amongst businesses using telecoms services:

  • Some dissatisfaction with customer service and broadband speeds;
  • Difficulties in negotiating a better deal and switching providers; and
  • Problems with mobile not-spots in certain areas of the UK.

The research also suggests that some businesses are not taking full advantage of the opportunity to switch provider and get a better deal.

Problems with customer service

The vast majority (8 in 10 or more of businesses) were satisfied with their service. However around half of the businesses Ofcom surveyed said they experienced some frustration with their telecoms services, particularly with inadequate customer service for landline services as well as the cost of landlines and poor quality connections with their mobile and internet/ data services.

Customer service was one of the main reasons for dissatisfaction among businesses that said they were dissatisfied with any aspect of their telecoms services. Problems not being resolved quickly and businesses being kept on hold on the phone were highlighted as key issues.

Businesses not taking full opportunities to switch

The research shows that many businesses believe there is sufficient competition in the market. However it also indicates that many businesses may not be taking full advantage of this, for example by switching provider to get the best deal or asking for a better deal from their current provider.

The research found that 35 per cent of mobile users and 37 per cent of fixed line users had changed their provider in the past four years, while only a quarter (24 per cent) of internet users had switched.

Broadband and mobile availability: the impact on UK businesses

The research shows that communications services are becoming more important for businesses with growing take-up of internet and mobile data services in particular.

However, one of the main frustrations for businesses was dealing with unreliable or poor connectivity. 15 per cent of businesses are frustrated with unreliable mobile connections, 23 per cent are frustrated with unreliable internet connections and 15 per cent are not satisfied with their broadband speed.

One of Ofcom's priorities in its draft Annual Plan for 2010/11*, which is also published today, is to understand the reason for mobile and broadband not-spots and Ofcom is carrying out detailed research into the extent of these issues in the UK. This follows Ofcom's research carried out this year into the actual broadband speeds that consumers are getting.

Business communications use

Today's research found that 90 per cent of businesses with five or more employees have internet connections however, 1 in 6 (16 per cent) of these businesses still use dial-up or ISDN internet services. This increased to 21 per cent for small businesses with 5 19 employees.

Keeping in touch on the move via mobile devices is important to businesses with business packages accounting for 18 per cent of total active mobile SIMs and generating 45 per cent of total mobile revenues. A third (34 per cent) of UK businesses in Ofcom's survey use Smartphone devices with a higher take up by London-based organisations (46 per cent).

Helping businesses get a good deal

Today Ofcom also published a guide to advise small businesses on how to get the best deal from telecoms providers which can be found at:

Ofcom's Chief Executive, Ed Richards, said: Ofcom's research highlights the critical importance of telecoms to UK business. Our research points to important opportunities for industry to respond more effectively to the telecoms needs of businesses. We are also promoting the interests of businesses through our focus on higher speed broadband services, our work on mobile and broadband coverage and improving business customer service."

Ends.

NOTES FOR EDITORS

1. Ofcom's Business Consumer Experience Research 2009 can be found at: http://www.ofcom.org.uk/research/tce/bce/

2. Ofcom has also published its Consumer Experience Research Report for 2009 at:
http://www.ofcom.org.uk/research/tce/

3. *Ofcom's draft Annual Plan for 2010/11 can be found at: http://www.ofcom.org.uk/consult/condocs/draftannplan1011/

4. The research sample included 1229 private, public and third sector businesses with five employees or more across the UK with surveys carried out between 19 June and 7 August 2009. The survey sample is representative of the make-up of the UK's businesses. Further details of the methodology can be found in Annex 2.

5. Under the Communications Act 2003 Ofcom's principal duty is to further the interests of citizens and consumers, including business consumers.