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Examining fixed phone and broadband products

ACCAN has commissioned a research project with Market Clarity to determine the telecommunications needs and wants of small business consumers and whether these are being met by the telcos.

The research raised concerns for ACCAN that the current offerings from telcos to small businesses do not match the increasingly heavy reliance that small businesses have on telecommunications. Service level agreements and performance guarantees for small businesses need to be available and enforced. Telcos need to champion their products and offer usable solutions and contingency plans in the event that their services fail. At the end of the day, the small business operator should not suffer inconvenience and loss of business due to a lack of services beyond their control. They should not have to deal with the details, they need faults fixed immediately or an agreed alternative needs to be provided by their telco.

Australian small businesses rely heavily on telecommunications services to do business. Even businesses that are less online-engaged still access banking, government and email services that require a reliable, affordable and fit for purpose service from telcos. Shop fronts for traditional business services like banks and government agencies are closing down, and governments are moving towards a digital first strategy. Because of this, internet and phone services are now an essential part of daily business as small businesses are being driven to operate online or risk being left behind.

Many small businesses choose their services based on reliability and the level of customer service they expect to receive. They appear to be willing to pay more for exceptional/superior service. The promise of dedicated business call centres, priority waiting times and fast fault rectification are all attractive benefits used to convince small business operators that their needs are a high priority. However, this research suggests that the current offerings are not living up to the promises and these consumers are becoming increasingly wary of the telcos' level of commitment to these promised benefits. Some are convinced that their business is so dependent on their telecommunications services that they are unable to complain as they may be subject to reprisal from their telco.

The challenge for telcos is to embrace the opportunity, be proactive and set out to define themselves in their industry as providers who look after small business customers. The arbitrary requirement that businesses are not allowed to use residential grade should be removed because it is restrictive and does not allow flexibility as work/life balance continues to dominate their environment. When they do choose business grade, this distinction needs to be real and backed up by service guarantees.

Download the full report at the bottom of this page.


Key recommendations for the telco industry:

  • Service providers better differentiate the value of their business offers so that the small business market can understand what value for money they are getting in selecting a business plan.
  • Service providers ensure that business grade services are supported by specialist business teams, and clearly explain to small business customers that this is part of the service offer.
  • There is a significant market opportunity for service providers to offer real service level and performance guarantees to their small business customers.
  • Telco front of house staff should be better informed about small business plans so that they can accurately deal with small business customers, or alternatively direct small business customers to dedicated specialist teams.

There are some significant small business information gaps that need to be addressed. These are:

  • Greater understanding of circumstances where there is a right to rebate or other redress.
  • More information about the comparative value of bundles is needed to guide choice.


The research consisted of a desktop based study examining current market offers designed for small businesses conducted in May 2015, and a survey of 200 small businesses conducted in May-June 2015, designed to assess small business behaviour and experiences with respect to business grade telecommunications services.

Key Findings

Restrictions on the use of residential services

  • Many service providers place restrictions on the business use of home phone or broadband plans, which ostensibly prohibit these plans from being used for business purposes. However, we also observe that many people use their personal phone or internet connection for business purposes — even if they are not running a business. With more small businesses working from home restrictive plans are unrealistic for these consumers (Section 3.1).
  • In discussions (or documented chat sessions) with customer service representatives researchers were told that it was fine to order a personal plan for business use, such as a home-office based business, or any premises that was not listed in a database as a business premises — even when this conflicts with information found in legal terms and conditions documents (Section 3.1).
  • In most cases, the documents that set out the legal terms and conditions for service agreements are voluminous, and the research considers it unlikely that a small business consumer would search out and read these documents before making a service decision (Section 3.1). This means decisions are likely to be made in reliance on information provided by customer service representatives, which the research found was not always consistent with the terms and conditions (Section 3.1).

Business grade service usage

  • Overall, the vast majority (95%) of survey respondents use some type of fixed voice and fixed broadband service. Most (72%) of the businesses interviewed for this study use business grade services for both fixed voice and fixed broadband. However, there were a number of businesses that did not use both services, as well as businesses that use residential grade services for at least some of their telecommunications needs (Section 6.1).
  • The most commonly cited reasons for selecting a business grade service (as opposed to a residential service) were better specifications, quality, options (including multiple lines), faster speed, larger data allowance, bundle inclusions, price and convenience. For both phone and broadband services, a significant number of respondents stated that their selection decision was based solely on the fact that they were running a business: phone (20%) and broadband (15%) (Section 6.2).

Business grade services don't necessarily cost more

  • The results of the market study and business survey suggest that it is a myth that business services always cost more than the residential counterpart. For both business phone and business broadband services we found plans which were less expensive or equivalently priced as compared to residential counterparts (Sections 4.2 and 6.3).
  • Roughly half of survey respondents believe they are getting value for money from their business grade services, as compared to a residential service equivalent: 52% of business phone service respondents, and 46% of business broadband service respondents (Section 6.4).

Business grade customers don't always get specialised business support

  • In the desktop study, all of the major business phone service providers that we reviewed stated that they have a dedicated business call centre team, as do 75% of business broadband service providers. However, the customer side study showed vastly different results, with only 44% of business phone service respondents believing they have access to a dedicated business call centre, and 33% of business broadband service respondents believing they have access to a dedicated business call centre (Sections 4.4 and 6.5).

Performance guarantees for small business services are rare

  • The desktop review of business grade services found that for the most part, service performance guarantees are not offered for residential or small business fixed line voice products. This is reflected in the small business study: 48% of business phone service respondents and 51% of business broadband service respondents expressed the belief that there were no service performance guarantees affiliated with their service. Furthermore, one third of study respondents were unsure — with only 17% (phone) and 15% (broadband) believing that performance guarantees applied to their service (Sections 4.6 and 6.7).
  • In many discussions with customer service representatives it was very apparent that the concept of service level agreements or targets was outside of their knowledge, training and/or database reference materials (Section 3.1).
  • For both business and residential services, none of the providers offered guarantees for timeframes in which calls would be answered, or faults would be resolved. However, one company stated that if they advised that a service fault would be rectified within a certain period, and it goes beyond that time, then compensation may apply (Section 4.7).

Service rebates are available, but infrequently applied

  • In the desktop review of business grade service offers, we found that service rebates were offered in conjunction with all of the business phone service plans, and 75% of the business broadband service plans in situations where there was a "significant loss of access." However, the vast majority of survey respondents have not received a service rebate for any reason (61% of business phone service subscribers, and 66% of business broadband service subscribers). Eight per cent of respondents in each group (phone and broadband) considered they should have received a rebate but had not (Sections 4.8 and 6.8).

Download: pdfInforming Small Business - Examining fixed phone and broadband products.pdf5.16 MB