SME s yet to seize the opportunity of UFB Fibre. November 2015

Similar documents
Unlock the potential of NBN

Communications services and SMEs Call for Inputs

Smart technology for smart business

Telecommunications Act Review: Post Regulatory Framework for Fixed Line services

Clear Creek County Broadband Survey Results

Dissertation Results Chapter Sample Results, Analysis and Discussions

Hosted IP TELEPHONY SOLUTIONS. PAY AS U GO & USE...Smart & Flexi- Investing. FUTURE-PROOF Software License Management

Telecommunications (New Regulatory Framework) Amendment Bill

RESPONSE THE TELECOMMUNICATIONS REGULATORY AUTHORITY OF BAHRAIN (TRA)

Changing trends in multichannel shopping and browsing preferences. October 2013

Regional Telecommunications Review Secretariat Department of Broadband, Communications and the Digital Economy

Telecommunications Retail Service Quality Framework

Sensis e-business Report

HOW TO KEEP UCC COSTS DOWN AS COMPLEXITY GROWS

The Reggefiber model Key elements of Reggefiber s strategy in The Netherlands

Enterprise Voice Transformation: Migration from TDM to IP

The UK Innovation Survey: Headline Findings 2014 to 2016

In your view, have we adequately defined the scope of our domestic backhaul services study? Please explain your view.

CHORUS LIMITED ANNUAL MEETING 1 NOVEMBER CEO s ADDRESS

Contents. Bitstream access: comments on the draft determination PUBLIC. Report for TelstraClear, 19 May Network Strategies Report Number 25013

VoIP Solution How to Make the Best Choice for Your Business

Wiltshire Superfast Broadband Survey

Hull & East Yorkshire

A special welcome in particular to those of you who have joined us here in our offices today - I look forward to talking to you after the meeting.

SYNOPSIS REPORT on the public consultation on the needs for Internet speed and quality beyond 2020 and measures to fulfil these needs by 2025

Sensis e-business Report

OFCOM REVIEW OF THE WHOLESALE BROADBAND ACCESS MARKETS 2006/07 TH

MAIN RESULTS OF THE SURVEY ON THE INFORMATION SOCIETY IN ENTERPRISES IN 2018

Submission by the Australian Communications Consumer Action Network to the Environment and Communications Legislation Committee.

The Use of Broadband and Demand for ifiber Among Community Anchor Institutions. July 2012

Section 30R Review of the UBA STD: Process and Issues Paper

Disrupting the Future

New Zealand Government Procurement Business Survey 2015

Broadband Customer Satisfaction Survey. Report C11/17

Narrowband Multi-channels Market Research

Social Commerce in A marketer survey on the state of social commerce and its future

Optimizing WAN for Application Acceleration

An assessment of the degree to which businesses access national mainstream employer skills and government business support programmes

GasBuddy and CSP collaborated on this study to provide the fuel industry with insights to launch, improve or revamp their loyalty programs.

CUSTOMER PROFILE Client: Town of Enfield Website: Industry: Public Sector Location: Suburb of Hartford, CT Population: ~45,000

Find the Best Fit for Your Business

CAIRSS 2012 Repository Managers Survey.

CHOOSING HOSTED VOICE: PAIRING VOICE AND NETWORK SERVICE GIVES YOU A BUSINESS EDGE

Guide Superfast Broadband technology and the creative sector

COMPTEL s Responses to Questions in Modernizing the Communications Act January 31, 2014

Business Communications in the cloud

Fixed Narrowband Retail Services Market Review

Watching 3G: sector inquiries by the European Commission

SME BUSINESS EFFICIENCY SURVEY

Rural Internet Access 2017 Survey. Underserved/Unserved Household Survey Results

97.8% of New Zealanders will have access to faster broadband by end 2019

Powering your customers retail experience

EXPECTATIONS AND CONCERNS OF THE EUROPEAN LANGUAGE INDUSTRY

This Regulatory Impact Statement (RIS) has been prepared by the Ministry of Economic Development (MED).

Residual Revenue with Connectivity Services

UCaaS: Benefits and Concerns for SMBs

For personal use only

An alternative picture Apprenticeship Levy survey

Business Connectivity Services Review Market research

Flowchart 1: Historical Example

to manufacturers THE MANUFACTURING INDUSTRY IS GROWING For British manufacturers, 2016 ended strongly with growth at a 30-month high.

IS YOUR PHONE SYSTEM HOLDING YOU BACK?

Accreditation scheme for price comparison calculators Launch of new scheme and invitation for applications

EUROPEAN COMMISSION. Comments pursuant to Article 7(3) of Directive 2002/21/EC

Review of the Telecommunications Act 2001: Discussion Document

Leadership 360. Sam Sample. Name: Date:

AWARD-WINNING BUSINESS TELECOMS

ISBN no Project no / Public version. A study under section 9A of the Telecommunications Act

K Factoring & Invoice Discounting Market Research Summary

The hidden reality of payroll & HR administration costs

VOCUS IP TEL POWERED BY BROADSOFT

FLAWLESS FULFILMENT IN THE RETAIL SUPPLY CHAIN

/ Q3-19 / Quarterly Operating Report / December 2018

/ Q2-19 / Quarterly Operating Report / September 2018

Transforming the Edge: The Rise of MEC

Electricity Authority

May BT Group response to HMG Review of Business Broadband

CEDA June The Changing Face of Australian Telecommunications and what that means for Australia.

Barry Leggetter CEO, AMEC. Opening / Introductions

Index. P Supply chain: logistics and barriers P Conclusions: highlights and insights

Vodafone One Business

Delivering super-fast broadband in the UK. Setting the right policy framework

SIX PILLARS FOR SUCCESS

The Impact of Poor Network Performance on Business Goals and Costs

The Growing. How consumer dependence on ratings and reviews continues to evolve Power of Reviews 1

Hosted VoIP Buyer s Guide

NBN Co Customer Collaboration Forum

The State of the UK Ticketing Industry 2013: Analysing the trend towards direct, online ticket buying

We then organised these characteristics into nine components of leadership team effectiveness: THE COMPONENTS OF LEADERSHIP TEAM EFFECTIVENESS

The City of Loveland Internet Survey Report

Catalyst for Change Digital Transformation Strategies Driving Network, Telecom Upgrades

The use of non-geographic numbers by service providers

Consultation paper on issues relating to Chorus proposed changes to the UBA service

MAIN RESULTS OF THE SURVEY ON THE INFORMATION SOCIETY IN ENTERPRISES IN 2016

CATALYST FOR CHANGE. Digital Transformation Strategies Require Telecom, Network Upgrade. by Robin Gareiss, President, Nemertes Research

The History & Future of Unified Communications Introducing Unified Communications

Hyperoptic s response to Designing the broadband Universal Service Obligation Call for inputs June 2016

Value Creation through Information Management. A Benefits Realisation Initiative

Descriptive Statistics

Rethinking voice. Survey of employers about employee voice. Sustainable business success

Transcription:

SME s yet to seize the opportunity of UFB Fibre November 2015 In 2010 a survey on business use of Ultra Fast Broadband (UFB) was conducted by Crown Fibre Holdings and TUANZ. Earlier this year (2015) it was decided to survey the TUANZ membership once again and to invite the Greater East Tamaki Business Association (GETBA) to participate given the length of time UFB had been available in that area. The survey was conducted online during the month of June 2015. Over November 2015, we published the key findings from the survey including our thoughts on the opportunities that we see arising from the survey results. We also published the data to the Figure.NZ site (search on TUANZ) note that at present that although the graph titles state that it is TUANZ members, the results include the GETBA results as well. Background The original 2010 survey attracted 283 respondents and this year's questionnaire drew 217 across the two organisations in total. Not all questions were answered by all respondents. Where sample sizes were low, they are identified accordingly, and therefore the answers to some questions should be considered indicative only. In 2010 the survey reflected a NZ corporate viewpoint, with more than half the respondents from businesses employing 100 or more staff. In 2015, due to the inclusion of GETBA, this was reversed with nearly 50% (47.17%) of all survey

respondents reporting 0 19 employees, what is considered by Statistics NZ to be a small to medium enterprise (SME). Corporate respondents made up a far smaller share of the 2015 sample at around 30%. Another difference this year was the increase in manufacturing and wholesale industries represented. The 2010 survey was largely dominated by telecommunications and education and training providers, and it was considered that this self selection may have resulted in a higher level of awareness of UFB than non respondents. The surveys in both years, by nature of the organisations involved, were heavily skewed by Auckland based respondents. SME Uptake In this section we look at the uptake amongst SME s in the survey and conclude that they are yet to seize the opportunities available to them. In 2010 around 64% of respondents said they already had at least one fibre service. This was not surprising given that fibre optic services had already been deployed in many CBD locations and the majority of respondents were corporates. For clarity on the difference fibre laid before the UFB initiative was not built as part of an open access network available for all retail service providers to offer services over, and therefore more costly. It was largely made up of a series of bespoke, point to point connections from the exchange directly into the corporate office. Back in 2010, of all respondents asked about their likelihood to connect to UFB within a year of it being available, 82% said they were likely to, highly likely to or definitely will connect. This could only be considered an indicator of future behaviour as no retail costs were provided then. 1

By 2015 49.5% of all respondents had actually taken up UFB or fibre at their head office or single site. More than 20% of those with UFB or fibre had pre existing fibre and more than 65% were corporates. Drilling down, the share of those who had not taken up UFB was 42.3% and of them, 60% were SME. 2

The message from several studies in recent years, that there are untapped productivity and efficiency gains available to SMEs with a strong internet presence, isn t yet changing behaviour. Cloud applications, remote working and voice over IP were the areas most businesses said they would consider investing in to use UFB. This was in line with the feedback in 2010, although collaborative tools ranked more highly then. Improved productivity, remote working and improved video conferencing were the most well known benefits of UFB. 3

Less than half the total respondents answered questions about the need for further information. Interestingly, the information most sought after was simple, high level and readily available, such as performance guarantees, UFB rollout timeframes, and speeds and bandwidth. Looking forward, the survey results suggest there remains a strong need for wholesale and retail service providers to improve awareness of UFB availability, especially among SMEs. Speed is the Killer App In this section we look at the respondent's view that SPEED is one of the key drivers to take a fibre service. In the survey we asked a series of questions that attempted to understand the key drivers for taking a fibre service In some ways it was unsurprising that the key underlying reason was the reliable speed of connectivity. 4

However when asked what speed broadband they would like to buy in future (n= 142), none of the respondents who already have fibre or UFB (n 70) = selected VDSL or 30 Mbps/10Mbps plans and 42% of that group would purchase plans of 1Gbps or more. Of those without fibre (n = 72), it was interesting to note a general preference for lower speed plans, with the exception of the 1 Gbps plan (selected by 13%), which has been heavily marketed through Gigatown and other campaigns. 5

Of those respondents who had taken up UFB or fibre at their head office or single site, the majority (45%) were on plans of 100 Mbps symmetric or less. Almost 30% were on 1Gbps symmetric plans or more (including those on dark fibre). This appears relative to the greater sample of SME respondents than corporate. Of the more than 42% (n=92) on copper broadband, around 23% reported they were on a VDSL connection. The same number didn t know what speed their fibre connection was. There are indications that opportunities lie in improving broadband speeds at branch offices. Nearly 45% of respondents (n= 83) had branch offices and although this sample diminished further when asked about the type of broadband connection they had (n=65), just under half were still on copper. 6

The trend to uncapped plans was confirmed with around a third of respondents no longer tied to a fixed amount of data. Other Drivers of uptake Price (n=85) again proved to be a challenging question to survey, especially as many broadband plans are still bundled with telephony. Accordingly caution should be exercised when considering these results. When asked what monthly fee they were paying for broadband now, 77% of respondents said they were paying under $200 per month. The median price paid was $109. Unsurprisingly, SMEs and non fibre users were the predominant type of businesses to answer this question. When compared with the 2010 survey results, it would appear businesses continue to be price sensitive. The similarity of the monthly UFB access fees to those for ADSL (copper) services was considered of greatest importance (74%) in encouraging UFB uptake by non fibre respondents. Other The UFB benefits which were ranked second and third most important after access fees in encouraging uptake by non fibre businesses were improved productivity (76%) and remote working (65%) respectively. All respondents considered cloud, remote working and voice over IP to be the three ICT services they would most consider investing in to leverage the benefits of UFB. These were similar to the responses given in 2010. The benefits respondents were least aware of in 2015 were reduced power costs and supply chain improvements. 7

Barriers to Uptake This sections looks at what barriers to uptake that became apparent from the responses in the survey. The first barrier is simply the apparent lack of awareness that a fibre service is available. It is interesting to note that in 2015, some 39% of all respondents without fibre (n=98) didn t know whether UFB was available in their area. When added to those who thought UFB wasn t available, that figure grew to almost 60% of those without fibre. This data was gathered when the rollout to businesses was some 93% complete. The TUANZ results are in line with those from the Statistics New Zealand Business Operations Survey 2014 supplied to Chorus which found that 48% of respondents cited lack of availability of fibre as the greatest barrier to uptake. Note that market research on UFB has generally shown high awareness of what UFB is, which should not be confused with where it is available. 8

The second apparent barrier was the perceived price of a fibre service. When all respondents were asked what speed broadband they would like to buy in future (n= 142), it is interesting to look at the impact of UFB prices, now that they are in market. Non fibre respondents (n= 72) were more likely to buy lower speed, lower cost plans than those already on UFB or fibre. Other barriers to takeup among non fibre respondents were the one off installation cost, the monthly access cost of the new service and the cost to break an existing 9

contract or potential risk to business interruption. There were perceived as the four greatest barriers to connecting, being considered a high or very high barrier by 56%, 44% and 34% equal respectively. Of least concern to this group was the need to gain a neighbour or building owners consent to connect and potential hardware, software or systems integration costs. When asked what businesses would like to know more about, respondents (n= 84) had a strong or great need for information on performance guarantees (56%), UFB rollout timeframes (49%) and speeds and bandwidth (47%). Non fibre users were more than twice as likely as those already with UFB/fibre to want to find out more about applying the benefits of UFB to their business model and products, services and solutions which run over UFB, however this was off a low base and should be considered indicative only. The survey in 2010 demonstrated a real lack of interest in these aspects of UFB by non fibre/ufb users, but given the sample size in 2015 (n =~40) it is hard to draw an accurate conclusion about the extent to which this has changed. When asked who they would trust to advise them on UFB (n = 121), over half the respondents chose their IT provider (50.4%) to assist, followed by their retail service provider (47%) or TUANZ (40%). Asked if they would undertake training to make the most of UFB, (n = 120) more than half the respondents (52%) were not willing to do so. Given this, the sample size of respondents to further questions about training was not sufficient to draw meaningful conclusions. 10

A summary Almost 50% percent of TUANZ survey respondents said they were connected to UFB or fibre. In March this year, Statistics NZ released its Business Operations Report from Sept 2014. The results from those businesses (with six employees or more) indicated that almost 25% of companies were using fibre optic telecommunications services. When the TUANZ results are measured against this baseline, it would suggest quite solid growth in UFB uptake by firms in the last nine months. This is in keeping with another finding from the Business Operations Report, that a further 13% of businesses using the internet planned to connect by September 2015. With the bulk of respondents with UFB of fibre being corporate customers, the TUANZ survey suggests there s still considerable opportunity for retail service providers selling UFB in the SME market. SMEs were less likely to have taken up UFB, in large part due to low awareness of its availability. Although the UFB rollout to businesses was 93% complete by 30 June 2015, almost 60% of respondents without UFB or fibre either thought they couldn t connect or didn t know whether they could. 11

The market continues to be highly price sensitive as was demonstrated in 2010. UFB price comparability to fibre was a driver of uptake and the survey showed a clear preference for lower speed, lower cost plans by non fibre users. Once a business has higher speed broadband, the survey suggests there s no going back, with no existing UFB or fibre users selecting the lowest speed plans. Keenly priced monthly access fees, improved productivity and remote working were considered the greatest drivers of uptake. Among non fibre respondents: the one off installation cost, the monthly access charge and the cost to break an existing contract or potential risk to business interruption were the four greatest barriers to connecting. Surprisingly, the need to gain a neighbour or building owners consent did not present as a significant barrier to connection among respondents. This is contrary to strong anecdotal evidence. 12

Cloud applications (59%), remote working (55%) and voice over IP (43%) were the areas most businesses said they would consider investing in to use UFB. This was in line with the feedback in 2010, although collaborative tools ranked more highly then. Improved productivity, remote working and improved video conferencing were the most well known benefits of UFB. Less than half the total respondents answered questions about the need for further information. Interestingly, the information most sought after was simple, high level and readily available, such as performance guarantees, UFB rollout timeframes, and speeds and bandwidth. Looking forward, the survey results suggest there remains a strong need for wholesale and retail service providers to improve awareness of UFB availability, especially among SMEs. It appears the opportunity remains for retail service providers to sell fibre into branch offices, as there was in 2010. UFB benefits such as improved supply chains and reduced power costs are not well known. Most challenging and least conclusive, is the question of business capability in the use of fibre. Only 55% (n= 120) of the total sample indicated whether they would undertake training, and of these fewer than half 48% (n = 57) said yes. Without any indication of cost or provider this should be considered with caution. End 13