UK: A line on the best phone. (2 of 2)

UK: A line on the best phone. (2 of 2) - MORI's figures are borne out in a survey by National Utility Services (NUS), which monitors telecoms and other utility charges for some 4,000 British firms. A 100-strong sample was asked by NUS to rate the service

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Last Updated: 31 Aug 2010

MORI's figures are borne out in a survey by National Utility Services (NUS), which monitors telecoms and other utility charges for some 4,000 British firms. A 100-strong sample was asked by NUS to rate the services of BT and Mercury on a one-to-10 scale. BT emerged with eight, while Mercury's score was seven.

NUS clients also welcomed increased competition. Some 51% felt that it would be beneficial to them, though 38% admitted that it would "complicate the situation".

Saving money is a powerful motivating force for the telecoms users. When asked what changes they would like to see in the UK telecoms industry, 71% of the NUS clients replied "lower costs". Interestingly, 9% wanted flexible billing, reflecting the long-running grumble about the lack of itemised bills from British Telecom.

The NUS clients gave Britain's telecoms operations a mixed verdict when compared with overseas carriers. They felt that the UK compared badly with the United States on servicing and price, but was fair when compared with Europe. There is a moral in this result. The US has moved further and faster than anyone else in the world to free its market for telecoms services, while Europe has definitely dragged its feet. BT's Booth admits that the UK has made itself unpopular in Brussels by pushing for faster liberalisation and competition on the continent. But resistance is formidable.

At the end of last year, for example, the German Government specifically ruled out privatisation of the Deutsche Bundespost Telekomm and refused to countenance any competitor along the lines of Mercury. The German argument was simple: any competitor would always remain a minnow for the immediate future, and the only way to achieve real competition was to carve up the giant telecoms operator.

The British Government has of course rejected this approach, preferring instead to create more small carriers to challenge both BT and Mercury. It will be interesting to see in the years ahead whether they do indeed become serious challengers or whether they devour each other and Mercury in the process, leaving BT in a more dominant position than ever.

Alternatively, if AT and T or a large Japanese telecoms group were to come into Britain and into partnership with, say, BR or a local cable television company, it would then be BT or Mercury which would have most to fear, despite their statements welcoming competition. Both have a great deal to lose. In its most recent annual results, BT produced £2.3 billion pre-tax profits. For its part, Mercury is only now getting into its stride as a money spinner for its Cable and Wireless parent. Little wonder, then, that as the market for telecoms services is rapidly becoming such an international business, BT has now changed its logo as part of a new £10 million revamp of its image.

Telecoms managers questions

Whom do you use for your telecoms needs: British Telecom, Mercury, or both?

British Telecom 30%

Mercury -

Both 70%

On balance, would you say you are satisfied or dissatisfied with the overall service that you get from British Telecom?

Satisfied 88%

Dissatisfied 8%

Neither 3%

On balance, would you say that you are satisfied or dissatisfied with the overall service that you get from Mercury?

Satisfied 86%

Dissatisfied 14%

With current arrangements with BT and Mercury, do you think that there is too much competition, too little, or about the right amount of competition in the telecoms market?

Too much 5%

Too little 73%

Right amount 20%

No opinion 2%

How beneficial has deregulation of the telecoms market been to you as a corporate customer. Would you say it has been:

Very beneficial 27%

Fairly beneficial 52%

Not very beneficial 15%

Not at all beneficial 7%

If there was a third carrier in the market, do you think that you would be likely or unlikely to use them?

Likely 55%

Unlikely 32%

No opinion 13%

Sixty respondents, all figures given in %.

(MORI interviewed 60 telecoms managers working for companies selected from the top 250 in the Times 1000. All interviews were conducted over the telephone between November 8 and 14 1990.)

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