Mobile-Centric Entrepreneurs

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Mobile-Centric Entrepreneurs

Information on how European entrepreneurs shop for mobile or telecommunication devices is not readily available in the public domain, but there are a few surveys of small and medium-sized enterprises in the United Kingdom and Western Europe that offer some helpful insights. The results of these surveys suggest that entrepreneurs in the region place a premium on security updates, phone selection, operating system upgrades, and affordability when purchasing mobile devices. They also suggest that most entrepreneurs, particularly those outside the technology sector, have limited understanding of telecommunication products and services and are familiar with consumer or residential telecommunication service providers only.

RESEARCH PROCESS AND PURCHASE CRITERIA

  • Most small and medium-sized enterprises in the United Kingdom research telecommunication products and services by scouring the Internet and consulting similar businesses, peers, and providers. Some enterprises, particularly the bigger ones in the category, attend conferences and trade fairs or consult information technology support companies.
  • Most purchase decision-makers at small and medium-sized enterprises are not technology experts and have limited understanding of products and services in the telecommunications space. These individuals find it hard to make the right purchase decisions.
  • According to Ben Dowd, chief executive officer of Onecom, the biggest independent provider of business telecommunication services in the country, small and medium-sized enterprises have several factors to consider when evaluating their telecommunication requirements. Among these factors are the nature of the business and operations, the size of the workforce, the level of internal communication and external communication needed, the number of communication channels, and the sophistication of communications.
  • Price appears to be a key consideration, especially for smaller enterprises. In a report prepared for Ofcom, the government authority regulating the telecommunications industry in the United Kingdom, it was mentioned that for some small and medium-sized enterprises that "need greater bandwidth than they currently purchase or can access, the price gap between business broadband and a leased line was too great to bridge and they remain capacity-constrained."
  • The following figures show what percentage of enterprises with 51-250 employees in Western Europe find various purchase criteria reasonably important, important, or very important: selection of phones (92%), affordable price (90%), regular and fast security updates (93%), guaranteed operating system upgrades (92%), absence of bloatware (78%), compatibility to Enterprise Mobility Management (82%), and support of deployment tools (80%). Based on these figures, it appears that smaller enterprises prioritize security updates, phone selection, affordability, and operating system upgrades over other purchase considerations.
  • Value for money, coverage and speed, and customer support appear to be the most important factors start-up entrepreneurs or small businesses consider when selecting a business mobile phone plan.
  • On the topic of mobile phone contracts, unlike larger enterprises that mostly have a single flexible contract that covers all users and devices, small and medium-sized enterprises tend to sign individual contracts instead. This may change over time, however, as it was mentioned in the report for Ofcom that "some of these relationships evolve with their mobile providers over time, such that they move from being perceived by the supplier as merely a series of individual contracts towards being perceived as a genuine 'business customer'."
  • These individual contracts are an important consideration when switching to another provider because they make it difficult for small and medium-sized enterprises to "switch to another provider all at once."

PREFERRED FEATURES AND SERVICES

  • According to Onecom, over the next 12 months, 35% of small and medium-sized enterprises in the United Kingdom intend to upgrade to 5G mobile service, 31% intend to upgrade to fiber broadband, 24% intend to upgrade to fixed broadband, 22% intend to upgrade to a fixed line, and 25% have no plans to upgrade.
  • These figures suggest that 5G mobile service, fiber broadband service, fixed broadband service, and fixed line service are among the telecommunication services that small and medium-sized enterprises in the country need, want, or prefer, and that devices tied to or bundled with these services may be in demand.
  • It appears small and medium-sized enterprises in the region want their mobile devices to have unlimited minutes and texts. Three, the fastest-growing 5G network in the United Kingdom, recently launched Simply Business, its offering tailored to small and medium-sized enterprises. This line has three data plans with unlimited minutes and texts on offer, with prices ranging from £7.50 per month to £17.50 per month, data caps ranging from 2GB to 40GB, and contracts lasting two years.
  • With this offering, Three hopes to give small and medium-sized enterprises great value and easy and reliable access to technology.
  • Surprisingly, compared to their larger counterparts, small businesses in Western Europe have a higher tendency, 42% versus 34%, to deploy newer smartphones (and consequently newer smartphone features).
  • The following figures show what percentage of enterprises with 51-250 employees in Western Europe find various security features reasonably important, important, or very important: antivirus software (93%), built-in mobile threat detection (91%), quick and regular security patches (94%), Enterprise Mobility Management (87%), and fingerprint sensor (83%).

SPENDING BEHAVIOR

  • According to Onecom, small and medium-sized enterprises in the United Kingdom now spend an average annual amount of £2,052 on telecommunication services, 40% higher than what was recorded in 2016. How much of this amount is allocated specifically to devices does not appear to be publicly available, however, due perhaps to the fact that devices and services are often bundled and purchased together.
  • Onecom is of the opinion that this increase can be attributed to the need of small and medium-sized business enterprises to keep up with technological advances such as 5G, cloud, fiber communications, and the Internet of Things (IoT).
  • Of small and medium-sized enterprises in the United Kingdom, 65% describe their availed mobile service as good or excellent, 25% describe it as average, and 10% describe it as poor or very poor. Based on these figures, it is likely that 10% to 35% of small and medium-sized enterprises may be thinking of switching to another telecommunications provider.

FAVORITE BRANDS

  • As small and medium-sized enterprises are unaware or nervous of consulting business-to-business telecommunication service providers, they tend to consider only "the mass market brands they are aware of as consumers."
  • In the United Kingdom, for example, most small and medium-sized enterprises, especially those outside the technology sector, are familiar with the following household names only: BT, Sky, Virgin Media, Vodafone, O2, EE, and TalkTalk. Awareness of key business telecommunication service providers such as Zen and Gamma is low.

RESEARCH STRATEGY

To find insights about how European entrepreneurs shop for mobile/telecom devices, we employed a number of strategies. To check if the desired information is readily available in the public domain, we initially looked for surveys, interviews, or accounts of European entrepreneurs and their mobile/telecom device purchasing habits. We searched for reports and articles that cover the topic as well, but unfortunately, we were unable to find anything specific to European entrepreneurs. This prompted us to look at small businesses, small business owners, or small and medium-sized enterprises or businesses, and smaller geographic groups (e.g., Western Europe, United Kingdom, and Germany) instead. We figured that by focusing on these groups, we may have more chances of finding useful information. We assume that entrepreneurs more or less behave the same way as small businesses and that small businesses in Western Europe are more or less representative of small businesses in Europe.

True enough, this pivot enabled us to find HMD Global's survey of Western European small businesses and their business smartphone purchase considerations, Onecom's survey of small and medium-sized enterprises in the United Kingdom and their telecommunications spend, and BDRC's report on the communication needs of small and medium-sized enterprises. From these survey results, we were able to gather valuable details about (a) important purchase considerations, (b) preferred features and services, (c) the amount spent on telecommunication services, and (d) favored brands. Our search for the technology budgets of small businesses did not produce any information about device spend.

We examined buying guides for business smartphones and tablets because some buying guides explain in detail what buyers look for. This strategy returned limited information, and we only learned that Startups.co.uk has interviewed startups about their business smartphone purchase considerations. Since new product and service launches offer insight into what customers demand or desire, leading telecommunication service companies in Europe, including Deutsche Telekom, Orange, Telefonica, and Telecom Italia, and their recent small business offerings were examined as well. With this strategy, we came across Three's recent offering for small and medium-sized enterprises and learned some information about what these enterprises want.
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