{"id":17545,"date":"2018-12-03T09:10:52","date_gmt":"2018-12-03T09:10:52","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=17545"},"modified":"2018-12-04T13:20:59","modified_gmt":"2018-12-04T13:20:59","slug":"ofcom-accused-of-ignoring-sme-overcharging-by-uk-mobile-operators","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2018\/12\/ofcom-accused-of-ignoring-sme-overcharging-by-uk-mobile-operators.html","title":{"rendered":"Ofcom Accused of Ignoring SME Overcharging by UK Mobile Operators UPDATE"},"content":{"rendered":"

A new report from Billmonitor<\/a> has accused Ofcom<\/a> of showing “little interest<\/em>” in tackling the allegedly “Wild West<\/em>” market for B2B mobile services. The investigation claimed that only one in ten small businesses get a “fair deal<\/em>” from their mobile operator and EE<\/a> is the most expensive UK provider for business contracts.<\/p>\n

The report (here<\/a>) states that Billmonitor sent several Freedom of Information<\/strong> (FOI) requests to Ofcom<\/a> asking whether its data confirmed differences in average bills between the “big three<\/em>” providers (i.e. EE<\/a>, Vodafone<\/a> and O2<\/a>). After being denied a number of FOI requests, the regulator eventually confirmed – in February 2018 – that there is a 15-20% cost difference between the cheapest and most expensive mobile provider for business services.<\/p>\n

Unfortunately Ofcom<\/a> refused to identify the most expensive provider and suggested that significant spend differences might be attributable to differences in usage, although they failed to provide any evidence to back up this assertion. More recently the regulator has said there are “issues<\/em>” with their data, which they claimed “cannot now be considered reliable<\/em>.”<\/p>\n

In response Billmonitor built its own model by analysing bills from 356 businesses (covering thousands of mobile connections), which they claim “accounted for differences in usage<\/em>.”<\/p>\n

Key Findings<\/strong><\/span><\/p>\n

* The study found, with 89.9% confidence, that EE<\/a> was the most expensive of the big three providers for business services.<\/p>\n

* By comparison O2<\/a> was found to be more expensive than Vodafone<\/a>, with 75% confidence.<\/p>\n

* The data suggests a 16.3% cost difference between the ‘big three’ mobile providers, for the average SME customer.<\/p>\n

* Only 1 in 10 SMEs get a fair deal from their providers and as a result UK SMEs could be overpaying by a collective \u00a31bn on their mobile bills.<\/p>\n

* Larger SMEs seem to be cut the worst deals from mobile providers and can each save, on average, over \u00a324,000 per year.<\/p>\n

\"mobile_operator_savings_by_sme_size\"<\/p><\/blockquote>\n

“These findings, if verified by independent investigations, raise serious questions. Price differences of 15-20 per cent, not attributable to differential consumption patterns, indicate that a market is not close to being competitive<\/em>,” said Tommaso Valletti, the European Commission’s Chief Competition Economist.<\/p>\n

Billmonitor is now calling on the Competition and Markets Authority (CMA) to investigate the current mobile provider market for small and medium sized business services.<\/p>\n

Dr Stelios Koundouros, Billmonitor’s Founder and Director, said:<\/strong><\/p>\n

“It is staggering that in a market so critical for businesses, there isn’t oversight to prevent SMEs falling victim to what is becoming its own \u2018Wild West\u2019. We call on the CMA to investigate the business telecoms market, to take over the job Ofcom seems to show little interest in despite Billmonitor\u2019s three year-long pleas, and ensure SMEs of all sizes get a fair deal when procuring a mobile provider.<\/p>\n

The fact that one provider can charge firms with similar average usage significantly more than another is a symptom of a broken market that needs fixing. As we move into the post-Brexit era, empowering the UK\u2019s SMEs with fairness and transparency – as the CMA successfully did for the energy market, whose uncompetitiveness was only half as costly for SMEs – should be a key point on the government\u2019s agenda.”<\/p><\/blockquote>\n

The report claims that the “telecoms and energy markets are cost comparable<\/em>,” while noting that a similar issue also affected the energy market before the CMA intervened. In its 2016 investigation, the CMA found that SMEs were “paying \u00a3500 million a year too much for energy<\/em>” (half what Billmonitor found for mobile operators) and that “average prices offered by the \u2018big six\u2019 companies were around 14% above the competitive level in the SME segment<\/em>.”<\/p>\n

However it’s important to stress that judging mobile operators in this way is notoriously difficult. This is particularly true with respect to business services where, not unlike consumer products, there can be key differences in value added features, usage levels, the quality of support, contract terms, network performance and coverage between operators. By comparison energy supplies are linear, thus we don’t tend to notice differences in the quality of the supplied gas or electricity.<\/p>\n

Arguably just because several operators with roughly the same service charge differently does not automatically mean the market is failing, particularly one that is supposed to be commercially competitive (i.e. you can switch provider) and where the quality can vary so greatly. Nevertheless some of Billmonitor’s gripes may at least warrant a closer look.<\/p>\n

UPDATE 10:54am<\/strong><\/p>\n

Ofcom has responded to offer a comment.<\/p>\n

An Ofcom Spokesperson told ISPreview.co.uk:<\/strong><\/p>\n

“The vast majority of smaller businesses are satisfied with the value they get from the mobile market. But we\u2019re making it easier for businesses to switch to a better deal, including new measures that mean they can switch provider by simply sending a text.”<\/p><\/blockquote>\n

The regulator has also worked to introduce end-of-contract notifications for small business customers and new rules to ensure that all SMEs are given clearer, more detailed information upfront about what service quality to expect (including whether they can claim compensation when problems occur).<\/p>\n

UPDATE 4th December 2018<\/strong><\/p>\n

Mobile operator EE has now given their reaction to Billmonitor’s report.<\/p>\n

An EE Spokesperson said:<\/strong><\/p>\n

“The findings of this research are unreliable due to the very limited sample size and the fact that the analysis is based on probability rather than actual customer bills.<\/p>\n

Our own benchmarking shows that EE\u2019s range of mobile plans for SMEs deliver great value to our customers. We are committed to delivering high-value, accurate and transparent pricing plans for SMEs with our highly skilled sales advisors working with customers to find the best value mobile package to meet their needs.<\/p>\n

EE serves hundreds of thousands of SME customers across the UK and was this year named Best Business Network by the Mobile Industry Awards. EE operates the UK\u2019s biggest and fastest mobile network, keeping our customers connected in more places than any other operator, with 100 per cent of all customer service calls answered in the UK & Ireland.”<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

A new report from Billmonitor has accused Ofcom of showing “little interest” in tackling the allegedly “Wild West” market for B2B mobile services. 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