Analysis: Business tariffs divide networks

Analysis: Business tariffs divide networks

Operators have launched a series of new business tariffs, signalling a departure from the status quo of recent years.

But not all of the changes have been well received. Customers and dealers have given a mixed reception to the adjustments ushered in by the networks.

Meanwhile, despite concern over the changes from pockets of the market, operators seem determined to take unified action.

A few trends appear to be emerging from the changes to the structure of business tariffs, with operators choosing to follow one of two clear paths.

T-Mobile was the first operator to announce it was changing its tariffs in the consumer space – and it quickly passed those changes onto businesses. Business customers were soon able to benefit from the new ‘flexible’ structure introduced by the operator.

Dealers selling T-Mobile were particularly impressed by the operator’s decision to remove the difference between propositions available from the direct sales team and the indirect channel, saying it showed a commitment to the indirect channel and a level of recognition that was previously lacking.

Orange was the next operator to try and muscle in on the business scene. In a similar vein to T-Mobile, Orange has chosen the flexibility route.

Many analysts point to the pair’s merger as the reason for the similar policies.

For Orange, the changes have generally been well received. Sources say it has asserted itself in the market with confident propositions and that it has the resources to deliver the changes effectively.

One source said: ‘In terms of flexibility, the Orange Business Sense tariff is ahead of the game in pricing and flexibility for the customer.’

However, he added that although it benefits the customer ‘it does not protect ARPU levels’, demonstrating that operators have been forced to take a flexible approach in order to gain customers.

Other operators who have refreshed their business tariffs include O2 and Vodafone, who appear to have opted for a different route.

One source explains: ‘The operators are reorganising their tariffs to drive revenue up.

They are facing huge change at the moment, which will have an impact on their businesses, if they are not pro-active in doing something about it. Factors like mobile termination rates and a slash in the price of roaming means that they have to make up the cash from somewhere.’

From the operators’ point of view, that makes perfect sense. However, their biggest challenge will be convincing their customers and selling partners that the decisions they are making are for the good of everyone – and not just for themselves.

Operators struggle to differentiate business offerings

Operators are already facing an uphill battle in changing dealer attitudes.
O2 and Vodafone have both had to backtrack on some of the changes they have initiated. Their plans to completely scrap old tariffs, with many benefits also being compromised, has not gone down well with their customers.

Dealers and customers have fed back their initial thoughts, and both O2
and Vodafone have had to continue offering tariffs that they initially planned to drop.

Some dealers have said the new tariffs from O2 and Vodafone do not offer what the customer really wants.

One dealer says: ‘Nice little extras like free national calls have been taken away and that is difficult to explain to the customer.’

However, others are more optimistic and argue that these changes should have been anticipated.

One source says: ‘I think all the networks are trying to re-establish themselves and differentiate from the other players in the market. The networks are trying to re-design and incorporate as much value as possible. They are building in lots of value.

They have increased the amount of money they are paying for tariffs and they all have certain unique aspects to their propositions.’

Evidently, there are changes taking place within business tariffs. The operators have all been looking to business sales for the past few years. The changes they are making may not be popular, but they appear to be a necessary evil for the operators. Some believe that the changes taking place are a precursor for what will happen in the consumer space. And that may have already started, with operator’s removing their unlimited data tariffs.

The tariffs

T-Mobile and Orange

T-Mobile and Orange have introduced ‘flexible’ tariffs, which are now based around a core offering of minutes, texts and data. However, customers are now able to choose another service or product, such as unlimited landline calls or extra data.


Vodafone planned to completely scrap Vodafone Total Business, a tariff which sources say is suitable for customers using voice and text, but not heavy data users. Total Business was meant to be dropped at the end of May but will now continue to be offered to existing customers looking to upgrade.


O2 planned a whole raft of changes earlier this year but was also forced to continue offering tariffs that it had planned to drop. O2 had announced that it would stop offering 18 month and 36 month bundled deals aimed at SMEs. The operator planned to only offer 24 month deals on mobile and 12 month deals for fixed-line offerings. However, after feedback from its partners, it changed its position.

Written by Mobile Today
Mobile Today


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