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Enterprise survey 2017 results for Western Europe

Terry van Staden Research Analyst
Tom Rebbeck Research Director, Enterprise and IoT

Video interview

Tom Rebbeck, Research Director at Analysys Mason and Head of the Enterprise and IoT research programme, and Terry van Staden, Enterprise Analyst discuss the results of our survey of 1600 enterprises across 8 countries focussing on highlights from our Western Europe enterprise report and how results for these countries compare with the other high-income countries in our survey. 

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Video and podcast transcript

Introduction: Hi, I'm Tom Rebbeck, Research Director of Enterprise and IoT at Analysys Mason. I'm here with Terry van Staden, Enterprise Analyst, and he's going to be discussing the results from our enterprise survey for Western Europe.

We have talked about this survey on a previous presentation but just very briefly, we asked IT and telecoms decision makers in 1600 enterprises across 8 countries about the services they use, their service providers and satisfaction levels.

Today we will be looking at the results for France, Germany and the UK and seeing how results for these countries compare with the other high income countries in our survey, Australia and the USA.

Slide 1:

Tom: Firstly, looking at satisfaction – we have calculated the NPS or net promoter score. If you are not familiar with this measure, in short a score of +100 is a good score, -100 is a very bad score. For telecoms operators, anything above around a score of +30 is good, but the best performing companies from other sectors regularly register an NPS over 60.

So with that context, Terry, how are operators in Europe doing?

Terry: Overall, operators in Europe have significant room for improvement. Here we have the NPS scores for France (the pink circle), Germany (in grey) and the UK (dark blue) compared with Australia (the square) and the USA (the triangle).

We do need to be careful about comparing satisfaction between countries as cultural differences results in different NPS being assigned to the same level of service. There are also some big differences in how the telecoms markets are structured and regulated, especially on the fixed side, between the European and non-European countries here.

Despite these caveats, international benchmarks suggest that there is a greater dissatisfaction with telecoms services in Western Europe than elsewhere. Large enterprises are particularly dissatisfied with their services. This may give operators considerable scope to put customer satisfaction first and differentiate themselves based on quality of service.

Tom: It is interesting that for most of the measures the European countries cluster and there isn't a big difference in the results. France does seem to be consistently lower than the other two countries though. Do we know why that is?

Terry: Without going too much down the line of national stereotypes, I suspect that the French may be tougher in their marking than other countries. I don't think we can read too much into the differences between the European countries as these are probably more cultural than anything. However, it's worth noting there were also large differences in NPS between competitors in France. Orange scored an NPS in line with some of the top operators in our survey, whereas its primary competitors scored particularly poorly which is bringing the overall score down.

Slide 2:

Tom: Let's look at some of the ICT services. As we have said before, in most countries, the market for traditional enterprise connectivity services, the revenues from those traditional services are in decline and many operators are looking to new services for growth. Before we look at the operator role in providing these services, how does the basic enterprise adoption score look?

Terry: These charts present the percentage of SMEs using certain ICT services, with unified communications on the left and the percentage of SMEs that take at least one cloud service on the right. The three European countries are in dark blue, non-European countries in purple.

From the charts we can see that Western European nations lag behind other high-income countries in terms of ICT penetration. Use of unified communications, in particular, by SMEs is significantly behind that of the USA and Australia, with France at just 14%, which is less than half of the penetration in Australia
Tom: Why is penetration so much lower?

Terry: SMEs need to see the demonstrable value of these services before purchasing them. The low rates of penetration suggest that providers of UC services have been slow to target the SME segment leaving a wide gap in the market for providers who can release simple packages specifically catered for the requirements of SMEs.

Slide 3:

Tom: Let's turn to the wide enterprise market, how does that look?

Terry: This next slide is showing the same basic information, penetration of unified communications and of cloud services, but for the large enterprise market.

The margin between Western Europe and other high-income countries diminishes slightly when we have a look at large enterprises here, but there does appear to be a regional gap in terms of ICT development. The UK appears to consistently be the most advanced Western European nation in terms of ICT development followed by Germany and France generally lagging slightly behind.

Slide 4:

Tom: You have shown that ICT adoption is slightly lower in Western Europe. What about the perspective of telecoms operators –how are they are performing?

Terry: Operators in Western Europe are currently less successful at selling ICT services to enterprises than in other high-income countries.

This chart shows the percentage of the respondents in our survey who also purchased security solutions from the incumbents in each country. There is a clear difference in the success rates between incumbents in Western Europe and other high-income countries at selling ICT services to their customers.

Tom: Why is that?

Terry: We think that there's two primary causes of this. The first is that, as we discussed earlier, satisfaction with telecoms operators is significantly higher in the other high-income countries which means that these operators have put themselves in a better position to sell ICT services to their customers. The second is that operators in the USA and Australia have been more proactive in buying ICT companies to advance their enterprise portfolios. Both AT&T and Telstra have made numerous ICT acquisitions which has put them in a much stronger position relative to Western European operators.

Slide 5:

Tom: Finally, just tell us what the survey said about IoT?

Terry: This chart shows the percentage of enterprises with an operational IoT solution. The position here is slightly different. The USA is the best performing country, closely followed by the UK. Surprisingly, despite all of the talk of Industrie 4.0, Germany has the lowest penetration of the five countries.

Tom: That is a surprise. What do you think is causing that?

Terry: The results from the survey suggest that while specific German industries like manufacturing are pushing IoT, this same commitment cannot be seen acros other industries.

Tom: What do you think this means for telecoms operators?

Terry: IoT is still in its very early stages of development – more than 70% of enterprises in Western Europe currently have no plans for IoT, which indicates there is still time for ambitious operators to take a role. Penetration of IoT among SMEs is also much lower, which suggests there is an opening in the market for simple off-the-shelf solutions which operators are well placed to supply.

Slide 7:

Terry: In summary, there are three fundamental conclusions to draw from this research:

  1. Satisfaction with traditional telecoms services is generally low in Western Europe – operators have scope to put customer satisfaction first and differentiate based on high quality networks and customer service.
  2. Use of ICT services in Western Europe lags that of other high-income nations. Operators only have a small portion of this market and will need to be more proactive in their acquisitions if they wish to explore the opportunities in new product categories.
  3. Adoption of IoT is currently low in Western Europe with only 14% of enterprises having an operational solution. The market is still in its very early stages of development and there is considerable time for ambitious operators to take a role.

Closing slide:

Terry: This video presents the highlights from our Western European enterprise report, which comes from a list of country reports discussing the state of the enterprise market in 8 different countries. Our research programme has published numerous reports on the telecoms market with upcoming reports on bundling strategies for SMEs and global enterprise forecasts covering the trends in traditional connectivity and ICT services. For further information or if you have any questions, please don't hesitate to contact me.