Remember ‘caveat emptor’ when it comes to business broadband

25 Dec 2008

With business broadband providers all claiming the best products, the best advice for SMEs is to be discerning in their judgement.

Strong competition, faster speeds and keen prices all mean now is a  very good time for SMEs to be shopping around for internet access. With 12-month contracts the norm from most providers, many small businesses shouldn’t need to wait too long before seeking out a better deal on broadband.

“It definitely is a buyer’s market,” observes Gary David Jordan, SME channel manager for UPC. “Over the last several months we have seen the

competitive edge definitely increase with some ISPs increasing speeds, and right now the SME market is incredibly competitive.”

Gary Keogh, managing director of Colt Telecom Ireland, agrees but points out that some SMEs’ options may be restricted. “The ability of businesses to shop around and get a good deal on their broadband connectivity is in some respects determined by their location.

“Businesses located in major urban centres have a good variety of choice, with broadband being available over several forms of infrastructure, such as DSL, cable, Wi-Fi and fibre. Depending on the type of infrastructure used to deliver the broadband connection, the level of quality and price of the service may vary greatly. However, the key point is there is more than one form of broadband solution to match their requirements.”

In general, alternative broadband providers have extensive networks around the country compared to a few years ago, so the situation is much improved and there are also many more options in terms of speed. In many cases, providers with their own infrastructure are able to offer a greater range of connection rates and prices than those reselling standard ADSL services. UPC’s cable network is available in Dublin, Cork, Galway, Limerick, Carlow, Athlone, Portlaoise and Clonmel, with 6MB, 10MB and 20MB per month services.

Colt’s offer includes a range of business broadband services on its fibre network path, which spans the wider Dublin metropolitan area. “However, we are looking to increase our network footprint by unbundling Eircom exchanges with a next-generation platform, which will enable us to deliver fibre-like services over the standard copper-pair network. From a broadband perspective, this will allow us to deliver true next-generation broadband services to even more businesses in Dublin,” Keogh confirms.

Smart Telecom currently offers services to 37 telephone exchanges around Ireland. According to regulatory director, John Quinn, this covers most population and business areas and amounts to around half a million phone lines in Ireland. This also includes its entry-level 4Mbps service, which is pitched at the very small business or home-office worker. “For larger SMEs, we also offer symmetrical bandwidth (same upload and download speed), which is ideal for those with larger bandwidth requirements. Our broadband speeds go up to 24Mbps within our SME products,” says Quinn.

Naturally, broadband providers are always looking to differentiate themselves. UPC, for example, offers 1Mbps upload speeds, which Jordan says is meeting specific customer needs. “That’s huge in the business world right now if you want to do the likes of videoconferencing,” he says. Quinn adds that contention or line sharing is an issue for some business customers.

“Not only are there much better financial deals to be had, but some operators such as Smart offer uncontended, or not shared, bandwidth, which means you actually get more for your money.”

Colt’s approach is to offer both – an uncontended service that is symmetrical, with equal upload and download speeds. This is important for those businesses that routinely send large files as well as receiving them, or that are interested in running some of their telephone calls via the internet for further cost savings.

Culturally, Irish people aren’t always the best when it comes to changing one provider for another – the banking sector is a good example of this. Similarly, there may be a perception that changing telecoms supplier is fraught with difficulty, when it has been made much simpler. Some operators such as Smart have forms on their websites which start the process. Quinn points out that the telecoms regulator ComReg runs the website, letting people compare prices from broadband suppliers – with the potential to make savings of more than €500 per year.

Gary Keogh says short contracts are the norm in the broadband market, but this actually works in favour of small companies with one eye on their cost base. “Business clients don’t want to be locked into long contract periods, certainly not longer than 12 months. Now that they have more choice in the number of broadband providers they can source their solution from, and the type of broadband connection they can purchase, they want to be sure that they can exercise this purchasing power as frequently as possible.”

According to Jordan: “SMEs need to be convinced it’s easier for them to switch than they make it out to be. But SMEs need to do their homework when thinking of switching and we’re confident that when they see the benefits, they will make the right choice.”

By Gordon Smith

Gordon Smith was a contributor to Silicon Republic