Why do Telecoms Suppliers always compare their Prices with BT?

 

It is interesting to notice that in many industries everyone compares themselves to the market leader.  Whilst the telecoms industry is like many others in this respect, it also takes the opportunity to make some great marketing claims, which often do not stand up to reality.

For example on their website Unicom show a 57% saving for BT customers.  There is however a small asterisk that reveals the following when you click on the footnote tab: –

*Percentage saving based on a typical customer spending £500 with BT on their standard business rates, correct as published on 1 March 2013

It is important to note that BT’s standard business rates are effectively their price list and bear no comparison to what is offered in their normal deals.  We recently moved a client away from Unicom to another supplier saving them about 70%.  While I think we are good, I would never claim to get savings of 87% over BT.  In that instance Unicom also tried to claim penalty charges even though the contract had expired.  We soon put them right on that point. It is interesting to note that Ofcom are now investigating

A second favourite marketing ploy is that which compares on just one element, such as the line rental or UK calls.  For example XLN advertise 77% savings on landline rentals.  This example was taken from the XLN website on 10/9/2013.

xln

 You will note that their comparison with BT is based on BT data that is 10 months old and does not reflect the current BT offer.  They also show the comparison on the 1st year rental only, despite the fact that it is a two-year contract.  In the detail it highlights the fact that this price is for 6 months only.  The saving then drops to 25%, which is still not bad, but still only on a par with most other business providers.

Another supplier, Chess Telecom, has a similar table. This example is taken on the same day as the XLN table.

chess 

On the XLN table the prices shown for each supplier are different from those on the Chess table.   Also it is not clear that Chess have set-up charges for calls.  This enables them to make a price promise on the actual call rates and yet they often end up more expensive than ours as none of the contracts we negotiate ever have a call set-up fee.  We recently analysed a bill from Chess to a client.  With the set-up fee, the effective cost per minute of a local UK call was 2.64p not the 1p they claimed.  We placed the client on a contract with a genuine rate of 0.85p per minute with no call setup – almost 2/3rds of Chess’s rate.

So, as with most marketing, there is an element of truth but it is not always the whole truth and nothing but the truth.  If you would like to understand what you are really paying and a get genuine set of comparison tables to see what you could be paying, contact us on 020 9012 0845.