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UK Businesses Demand Better Customer Service More Than Pricing From Telecoms Suppliers, warns Yankee Group

- 76% of UK SMEs choose suppliers because of customer service not price
- Over a third of businesses look for one supplier to provide all services
- Over a third of SMEs plan to increase spend on broadband, mobile voice and data services this year

Customer service really is King for UK small to medium sized companies (SMEs), particularly when it comes to choosing telecoms suppliers. New research from the Yankee Group, commissioned by Telstra Europe reveals that for 76% of respondents, service is more important than price when selecting new suppliers.

Whilst the main reason for switching suppliers is to find cheaper solutions (71%), 62% of businesses stated that poor technical quality of service would lead them to change suppliers and over a third (38%) would abandon their supplier if they experienced poor customer service.

The good news for the telecoms industry is that over a third of SMEs plan to upgrade their services this year, increasing spend on broadband, mobile voice and data services. The move to VoIP is the key driver. 40% of respondents already claim to be enjoying converged voice and data services, but a third intend to adopt VoIP this year, creating a huge opportunity for the industry. A third of companies stated they would like to receive all their services from one supplier which will mean a good opportunity for companies who can offer a full range of voice and data services or commercial bundles.

It is no great surprise that 60% of businesses are adopting VoIP to reduce their monthly bills, but 22% anticipate wider business benefits, such as increased employee productivity and the ability to support new applications (26%). The major concern about moving to VoIP is security of data and planning for disaster recover which was rated as the top IT headache, alongside the pressure to reduce costs (46%).

Andy Hedges, CFO of Telstra Europe commented, “The research has clearly shown that poor quality of service is driving churn within the telecoms market. As SMEs move towards converged voice and data services this year, the industry should realise good customer service and technical support is more important than price. The majority of SMEs without dedicated IT departments are in danger of being baffled by pricing and unable to differentiate between providers and products.”

Anette Schaefer, Director Broadband & Media, Yankee Group EMEA, said “Pricing is important but these companies are looking for market expertise to help them understand the technology and the tangible business benefits. Technical support and strong service level agreements will also be key in inspiring customer confidence and increasingly their understanding of the new technology.”

Hedges added, “Security fears continue to plague SMEs’ businesses, particularly as they adopt the new technology; they need to be confident their supplier can assure them of their data security and back up. Over a third of businesses are struggling to manage with minimal IT resource and many will be looking for a hosted VoIP service not only to manage their migration to a new service but also to take away all their security headaches and provide the business continuity assurance that is so critical to SMEs.”


Media Contacts: Telstra Europe

Peter Fitzpatrick, hbl media, 020 7612 1830 /
Kathryn Hughes, hbl media, 020 7612 1830 /

About Telstra Europe:

In August, Telstra launched its converged voice and data “Hosted PBX” service which, being based on SIP, VoIP and broadband technologies, enables small and medium sized companies to benefit from all the features of a costly PBX system with little investment and lower ongoing maintenance and support costs.

The service has three pay-as-you-go service bundles for standard, enhanced and premium users and further information can be found at:

Telstra Europe is a wholly-owned subsidiary of Telstra Corporation Limited (ASX:TLS). Operational in Europe for over 14 years, Telstra offers an extensive range of voice and data services including total managed network solutions using Broadband, MPLS Wide Area Networks, Internet Access and Point-to-Point Connectivity, hosting and co-location services and enhanced voice solutions to medium sized business and multinational corporations in the UK. Additional value added services include fully managed CPE, consulting, planning, project management, and Telstra’s online Service Tools application, which enables customers to monitor their network and manage support tickets at any time.

Delivering connectivity business solutions, value-added services and complex managed IP solutions, Telstra Europe’s portfolio is complemented by its independently-owned and managed switched network. Switches are located in London, Birmingham and Manchester working alongside 14 co-location points throughout the UK. Additionally, state-of-the-art, resilient data centres are located in London, Docklands, Cambridge and Sunderland.

Parent company, Telstra Corporation Limited, is a full service global telecommunications company.

About Yankee Group:

Yankee Group is the expert in navigating the global connectivity revolution. For more than 35 years, Yankee Group's strategic vision, research and analysis, quantified market intelligence and credible advice have been guiding innovation and empowering our clients to make critical business decisions. Headquartered in Boston, Yankee Group has a presence throughout North America, Europe, the Middle East, Africa, Latin America and Asia-Pacific.