Published - 10 March 2022, UK
Let’s talk money
A perfect – or should we say imperfect – storm is leading to price increases across the technology sector, impacting a range of telecoms, mobile, IT and connectivity products and services. Coupled with the well-publicised hike in energy prices, the financial hit on businesses is clear.
By Sonia Older
The changing landscape
In recent months we’ve seen considerable increases in a number of our key supply chains, a trend which is expected to continue through 2022. As you might expect, multiple factors are driving these increases. Some are having an impact on industries across the board, others relate specifically to the technology sector. At every opportunity we’ve endeavoured to find cost savings to mitigate the increases to avoid an impact on our customers, however we’re now in a position whereby price adjustments are necessary to maintain our current levels of quality and service.
Our commitment to competitive pricing remains unchanged and we’re now more determined than ever before to support you in finding the best solutions for your business. At the right price.
So, here we look at what’s driving the prices up and what your business can do to limit the impact.
What’s causing the price increases?
1. Investment in infrastructure
Usage across networks continues to increase with businesses and customers relying on fast and reliable connectivity more than ever before. So, investment levels in networks, services and the latest technology are high. Openreach is investing more than £15bn to cover 25 million premises (c80% of the UK) with Fibre-to-the-Premises (FTTP) by December 2025. Changes to how OFCOM regulate cost-based charges have opened the door for Openreach and its ability to recover this ongoing investment, leading to significant price increases in the connectivity supply chain.
These price increases also reflect the increasing cost of network maintenance and encourage customers onto modern, digital alternatives. BT’s aim is to move all customers from the old analogue public switched telephone network (PSTN) to a fully digital network by 2025 – and price rises seem to be a strategy to encourage customers to shift to newer technology.
Our supplier’s operating costs have increased. Whether it’s wage inflation, fuel and energy prices or global supply chain issues, most suppliers are feeling the pinch and passing these costs along the supply chain.
Mobile networks have implemented inflationary increases for many years, but with inflation having been in the region of 2% for a number of years, these increases have largely gone under the radar. With the Consumer Price Index (CPI) now running at over 5%, the impact is more severe.
The increase will be the rise in the CPI plus 3.9%, with a total increase of 9.3%. Many of you have been asking about the additional 3.9% and why this is being added to CPI. The 3.9% has been justified by BT and other major carriers due to continually increased operating costs and investment in the digital transformation, including the withdrawal of all legacy products and services.
It must be noted the CPI increase simply does not cover the increase in costs we are all facing… wages, cost of living, fuel and more. These have, unfortunately, all sharply increased our cost of sale, delivery and support.
3. Microsoft price changes
Microsoft 365 has brought us products that have become an integral part of our work lives over the years, along with new additions that we can't imagine working without. In March 2022 Microsoft announced a price increase for its business customers. Since Microsoft 365 (formally Office 365) launched, its product suite has expanded to include a whole raft of powerful new applications including Teams, Power BI and OneDrive, as well as AI and automation capabilities. Its innovative products, together with the integration of applications such as Excel, Word and PowerPoint into Teams, have enabled effective communication, collaboration, security and compliance as many businesses moved to remote or hybrid working environments.
With this in mind, the first notable price increase in 10 years announced by Microsoft may not come as a huge surprise.
So, what can you do about it and how can Focus Group help?
Embrace the digital revolution
Digital transformation is the strategic integration of technology into all areas of business, fundamentally evolving the way you operate and deliver service to your customers. It enables you to embrace intelligent, tech-facilitated systems across your business operations – allowing you to thrive, grow and stay one step ahead of the competition.
Digital transformation can mean anything from IT modernisation, such as a shift to cloud computing, to the implementation of a hosted phone system or harnessing the power of new technology to interact with customers in new ways.
As experts in our field, we will assess your specific business requirements and work with you to implement a bespoke digital transformation strategy. We’ll work with you to employ industry-leading applications and innovative tools to ensure your team is equipped to deliver optimum efficiency and unrivalled service – in the most cost-effective way possible.
Talk to us about shifting to a complete suite of digital solutions and take advantage of package discounts. Plus we’ll work to protect your business against inflationary price increases for up to 3 years.
Upgrade and save
The old mantra rings true when it comes to technology - out with the old and in with the new. Legacy products such as analogue and ISDN lines or ADSL will doubtless become more and more expensive as Openreach look to phase them out ahead of the 2025 deadline. IP-based services are more reliable, less expensive to maintain and facilitate lower call costs so it makes sense to take advantage of the benefits sooner rather than later.
How we all work continues to evolve at an unprecedented pace, with fast and secure connectivity at the centre of that change. When it comes to implementing new technologies, we’re here to support our customers to ensure this new technology supports your growth ambitions and protects the future of your business infrastructure. And we’ll be by your side to keep your IT optimised, your business phone system at the top of its game, your data secure and your customers happy. At all times.
Let us talk to you about our full range of products and services. Whether it’s saving you money on your energy or implementing an effective hybrid working solution to maximise operational productivity, we’re here to source the right solutions for your business – at the right price.