Billmonitor’s analysis of the UK business market for mobile phones shows that where consumers overpay by 66% for their required level of service, businesses overpay by 96%. Such huge savings... found by so few.
The scale of savings is staggering
According to Billmonitor’s new analysis, the first of its kind in the UK analysing actual billing data from SMEs, an astonishing 49% of UK businesses are spending more than twice what they need for mobile phone service with the three major providers (Vodafone, EE, O2). We estimate total annual overspend for UK SMEs of £1.0bn, whilst an extraordinary 38,000 UK SMEs could each save at least £10,000 per year.
Billmonitor analysed billing data from thousands of connections using proprietary software developed by Oxford mathematicians. Contrary to expectations, the analysis shows that where consumers overpay on average by 66%, businesses overpay on average by 96%. Even in a tender process, the lowest of your offers is unlikely to be nearly as low as that network can offer if you know what to ask for. Why is the business market so uncompetitive?
Obfuscation clouds the market
The business mobile market lacks transparency in two key areas: it’s too hard to work out what you need, and too hard to find what’s available. The operators provide fully itemised bills, from which even some experts would struggle to extract the information you need: a business with 50 connections typically receives a bill of 150 or more pages every month. Then, the operators do not publish all available tariffs. With limited visibility as to what is available and how much it costs, you are unlikely to find the best deal for your business.
Opportunities to streamline costs
It’s easy to be happy not knowing. Though 93% of SMEs could save on their bills, 80% believe they enjoy a good tariff. The most substantial savings come from diverse and hard-to-predict sources, not from switching network but from negotiating the right contract with your existing provider. In order to demonstrate this, we have analysed two pairs of businesses with similar usage. In the first, one SME pays nearly twice as much as the other, and both can save: one by switching from shared to individual data allowances, the other by terminating dormant lines. In the second, two larger SMEs have tailored contracts yet both overpay substantially, one through charges for individual UK voice calls and the other through bundles for UK voice and data.
Why hasn’t the government acted?
You can’t rely on Ofcom: they have to date focused on the larger and higher-profile consumer market, and they have to take into account the networks’ interests as well as businesses’. Moreover, Ofcom cannot initiate new legislation: they can only enforce existing laws, and even for that they have limited resources. In particular, Ofcom has not managed to make pricing as transparent for business as for consumers.
To download the full report, click the button below: