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Telecoms Deregulation Leaves the Customer Confused



More than a decade after UK telecoms services were opened up to competition, business users are still not exercising their freedom of choice - with more than one-third admitting they are not confident that they are getting the best deals, and many confused by the proliferation of price packages and technologies from competing network operators. This is one of the key findings of ‘More Competition, More Confusion, Customer Loses’, an independent survey into how UK businesses buy telecoms services commissioned from MORI by Unica, a communications provider for businesses.

The survey of 301 senior managers in the UK responsible for telecoms reveals that many companies find it hard to juggle between different fixed, mobile and Internet network operators, and that many would prefer an impartial intermediary to shop around on their behalf. Half of all the respondents want to consolidate all their communications expenditure on a single monthly invoice.

Only 25% of SMEs and 17% of large businesses are 'very satisfied' with their current network operator - the remainder being only 'fairly satisfied', neither satisfied nor dissatisfied, or dissatisfied. According to the survey, 53% of large businesses are frustrated by their account team being constantly reshuffled by the network operator, while 36% of SMEs accuse network operators of failing to understand their own products.

One-third of all respondents say they are locked into contractual obligations that prevent them from switching operators. Meanwhile, more than 75% accuse network operators of only being interested in selling their own branded solutions, rather than developing products and services tailored to their specific needs.

According to Noel Dunn, co-founder and managing director of Unica, "With this survey, we wanted to understand the needs and frustrations of business users faced with the multiplicity of fixed, mobile and internet services now on offer. This is a market that has changed dramatically with deregulation. The downside is that competition has generated confusion and complexity".

Other findings of the survey include:

  • Some 60% of large companies have changed network operator in the past five years, compared to only one third of SMEs.
  • Some 81% of large businesses switch network operator to get a cheaper price.
  • Nearly half of all large businesses and 38% of SMEs find it hard to work out the best deals on offer.
  • Two-thirds of telecoms managers at SMEs and 79% at large businesses say that their job function has become more complicated in the past few years, while 64% and 84% respectively want better management information from network operators.
  • Some 48% of SMEs and 66% of large businesses want the flexibility to add and subtract services as their needs change.

The research took place in August 2000. MORI conducted 301 telephone interviews with senior managers responsible for IT, telecoms and networking - 100 among SMEs and (businesses employing 2-249 employees) and 201 among businesses employing 250 or more. Data for SMEs was weighted to reflect the proportion of different company sizes.