benchmark-it performance

Transcription

1 benchmark-it performance This new 311-page report comprehensively profiles and compares 31 key providers of telecoms and related services to UK SME customers. The report includes the following: Expert market analysis and forecasts Profiles of 31 service providers Verdict Summary (strategy and recent activities) Network & Portfolio Management (revenues, reputation and promotion) Compares them in terms of: Network Portfolio Revenue SME focus Who should buy the report? Operators selling telecoms services to SME customers in the UK Companies investing in, partnering or supplying the above Operators wanting to understand the impact of competition on the SME segment in a relatively mature market Key benefits: Source of key information on 31 suppliers Independent market analysis and comparisons Gives customers time to concentrate on analysing implications and to formulate action plans Key conclusions: Fundamental market changes are taking place, with broadband becoming almost ubiquitous and traffic converging to be carried over IP; This is leading to a surge in product bundling and has encouraged the entrance of/renewed interest by some major players into the SME market; With BT having apparently turned its SME operations around, smaller players face a squeeze if they do not differentiate their customer service. Pricing is 995 for a corporate licence (intranet licence).

2 benchmark-it performance UK SME Segment Telecoms Service Providers December 2006 Author: Rob Pritchard

3 TABLE OF CONTENTS Executive Summary Page 3 Market Analysis Page 4 Benchmarked Suppliers Page 9 8el Page 10 Alternative Networks Page 20 ATC Page 30 Azzurri Page 37 Be Page 45 Biscit Page 49 BT Page 61 Chess Page 87 Claranet Page 93 COLT Page 103 Easynet Page 116 Exponential-e Page 127 Gamma Telecom Page 133 Isis Page 142 Kingston Communications Page 146 Matrix Page 161 Mistral Internet Page 167 ntl:telewest Business Page 178 Opal Telecom Page 189 Orange Business Services Page 202 Pipex Page 209 Redstone Page 222 Star Internet Page 230 TalkTalk Business Page 236 Telstra UK Page 240 THUS Page 250 Twang.net Page 267 Unicom Page 274 Verizon Business UK Page 280 Vodafone Page 294 Zen Internet Page 301

4 Executive Summary The SME segment remains a key driver for growth in the UK economy, with more than 4.3 million small businesses in operation. As such they continue to represent a key target market for a wide range of communications services providers. Fundamental market developments are taking place as broadband becomes almost ubiquitous and an ever increasing proportion of communications traffic is carried over IP. Convergence is not just happening between voice and data/ip, but also between fixed and mobile services. This is driving a greater propensity to bundle a range of products and services as providers look to maximise their share of each customer s spend, whilst hoping also to engender greater customer loyalty by increasing barriers to churn. At the same time, customers appear to be willing to adopt bundles providing they receive a reasonable discount and levels of customer service are satisfactory. With the growing movement towards product bundles, an opportunity has been spotted by a number of larger service providers, notably those with a background in mobile services, to expand their addressable market and defend against churn. The entrance of a number of substantial players into the market poses a threat to many smaller service providers, especially as economies of scale and brand strength can be of great importance in this market. Smaller service providers must decide whether to become a part of the on-going market consolidation process or must evolve a differentiated customer proposition that gives them an edge over their larger rivals. In parallel with this process is the news that incumbent BT appears to have turned its SME-focused operations around and is actually growing revenues from this segment, driven largely by new wave products and services. Despite the potential squeeze on smaller players and resellers from these developments, they have tended to continue to grow revenues at double-digit rates, often as a result of acquisitions, but usually also backed by on-going organic growth. Although there is a degree of natural growth in the segment as the number of small businesses continues to grow, the increasing expectation that voice can be free and that customers will continue to get more for less across all their communications services may point to a period of tougher competition ahead the dynamism of smaller players will help them in such a scenario, the size of larger players should help them. The other key ingredient that may impact the market is the effect of the regulator the past year has seen the LLU (Local Loop Unbundling) market spring to life as a result of regulatory intervention, so service providers should keep a wary eye on any potential developments. In the meantime, the UK s small businesses continue to benefit from a highly competitive market for the communications that tend to play an increasingly important role in the running of their operations.

5 BT SAMPLE PAGE Verdict: Following a long period of steady declines in revenues from the UK SME segment, BT recently posted year-on-year growth, driven by take-up of new wave services and supported by successful defensive strategies to protect existing traditional revenues. The company is also looking to, and apparently succeeding at, selling value-added services, largely on the back of its market-leading broadband customer base. In addition, it has continued to make selective acquisitions in order to bolster market share and improve its position when trying to expand its addressable market into the IT hardware, software and integration markets. Summary BT is one of the world s leading providers of communications. Its principal activities include networked IT services, local, national and international telecoms services and higher-value broadband and Internet products and services. In the UK, BT serves about 20 million business and residential customers, as well as providing network services to other operators. The company describes its goal as follows: Our ambition is to be the best provider of communications services and solutions for everybody in the UK and for corporate customers in the rest of Europe, with global reach through partnerships. Essentially, BT s business goals fall into defensive and growth categories: Defend traditional: o Improved service; o Aggressive and creative marketing; o Price innovation; o Reduce costs/improve margin; Grow new wave: o Broadband; o Mobility; o ICT; o Global Solutions. In terms of BT s SME division, BT Business, the company lists the following as its inherent strengths in the market: Trusted brand; Strong channels; National and local presence; High customer touch; Credible partners.

6 SAMPLE PAGE Network Reach: Easynet has built a fibre-optic network around the UK, consisting of 350,000 fibre kilometres on a 4,450 route kilometre DWDM/MPLS network; The network, which has 36 PoPs, runs through more than 50 major towns and cities with well over a million businesses and nearly 3,000 large corporations located within 1.5km of its footprint; Metropolitan rings in: o London; o Birmingham; o Edinburgh; o Glasgow; Four data centres: Brick Lane, London (78,000sq feet) main centre, London, Slough and Brighton; 25 BT DMSU connections for dial and ISDN access; 27 co-location facilities; The following are cities where services over unbundled local loop are known/planned to be available: o Manchester; o Leeds; o Sheffield; o Newcastle; o Edinburgh; o Glasgow; o London; o Birmingham; o Liverpool; o Nottingham; o Bristol; o Reading; o Cambridge; o Guildford; o Thames Valley; o Surrey; o Kent; o Hertfordshire; o Essex; LLU (Local Loop Unbundling) in 373 exchanges in the UK as at 18 th July The target is 1,200 unbundled exchanges by December 2007 (passing 70% of UK homes and 85% of all business sites); Easynet has estimated that the installation of its own equipment in a BT exchange becomes economically viable once it has attracted 25 customers; The network is also connected to ten major UK Internet peering points.

7 SAMPLE PAGE Portfolio: SiNET Hosted VoIP Service: Subscription-based hosted VoIP solution for SMEs and multi-sited corporates; From per user per month; Feature phones; Feature-rich applications; Full business service cover; Line rental and free minutes; Unlimited free calls between sites; Secure Web-based user portal; No capital outlay; All sites integrated under one auto-attendant; Extension dialling across multiple sites; Centralised management; On-line reporting and billing; Reduces costs of MACs (Moves, Adds & Changes) by up to 90%. Hardware Systems & Applications: Including converged data and IP systems, traditional telephone systems, communications servers and data solutions; Full consultative and design services; Range of leasing and rental options; Supply and installation of structured cabling, site audits, testing and record creation; Value-added applications: o CTI (Computer Telephony Integration); o CLI (Caller Line Identifier); o Screen-popping instant display of information about a caller on a computer screen; o Voic ; o Unified Messaging linking voic and ; o Voice Recognition and IVR (Interactive Voice Response); o Call Centres; o Call Logging and Call Recording. IP Technology: VoIP service (as above), including: o Unified Messaging; o Find Me/Follow Me; o Call Centre; o Auto Attendants.

8 Management SAMPLE PAGE Revenue: Results for the financial year ended 30 th September 2006 saw Alternative Networks turn over million, up 42% on the previous year s million. Operating profit was 6.7 million, up 61% on million the previous year. Of the growth in revenues, 11% was accounted for by organic activities, the rest by the ICB acquisition. SME Focus: Alternative Networks is focused on the business-to-business market, with a distinct emphasis on the SME segment and on smaller corporates. Alternative Networks has over 4,000 customers in total. Management Team: The company was co-founded by James Murray and Chris Wilson in Murray is CEO. Alternative Networks employs over 300 people across five offices in the UK (in London, Bracknell, Bristol, Manchester and Leeds), more than half of whom are involved in selling and distribution. Advertising & Promotion: Alternative Networks positions itself as offering solutions, excellent service and flexibility. Reputation: Alternative Networks has been listed in the Sunday Times Virgin Atlantic Fast Track 100 league table in 2000, 2001 and It is also listed in the Sunday Times ARM Tech Track 100 and the Deloitte & Touche Technology Fast 50 UK. In 2005, Alternative Networks co-founder was selected as Young Entrepreneur of the Year. The company also claims to be a leader in innovation: One of the first companies to offer a independent range of 0800 and 0845 nongeographic number services;