February 15th 2023
WHY ARE MY PRICES GOING UP?
1 - Investment in infrastructure
For the first time in our history, the future of work is more online than it is physical. The expediential growth of ‘Work From Home’ means that 20-25% of the workforce in advanced economies are likely to be working remotely or adopting a hybrid approach.
Many industries need to ensure their technology and systems can support this change in working habits. Meaning businesses and employers are tasked with the responsibility of making sure everything runs smoothly and securely, wherever their workforce is based.
As a result, usage across networks continues to increase with businesses and customers relying on fast and reliable connectivity, more now than ever before. In turn, 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. Ultimately this has led to price rises for consumers.
2 - The future of telecoms
I’m sure you have all heard about the PSTN switch off in 2025.
The price increases connected to the fibre broadband rollout, in turn cause the costs of the network maintenance to escalate. This work that is critical in order to move businesses and consumers from old analogue services, supported by the legacy public switched telephone network (PSTN), onto modern technology.
BT’s aim is to move all customers from the old analogue PSTN to a fully digital network, ahead of the full PSTN switch off in 2025. As such, its price rises could be viewed as a strategy to encourage customers to shift to newer technology.
3 - Inflation
Simply put – costs are going up across the globe, in every industry and sector. 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 10%, the impact is more severe.
4 - Supporting a hybrid workforce
In a post-COVID world, it has become far more expensive to provide the right level of service and support to meet our customer needs. Our customers (UK-based SME’s) now operate from multiple locations, more than they were doing before the pandemic..
For example, instead of a team being located in a single site office or location, businesses of every size, shape and sector, are now supporting hybrid working environments i.e. working from home, working remotely, from satellite offices, on a rail commute, working somewhere else in the world, and so on.
As a result they have effectively become multi-site and each person in the workforce requires fast, reliable broadband connectivity so they can work from home; mobile devices and data so they can work ‘on the move’; a phone system that keeps the team connected to colleagues and customers wherever they are in the world; and adequate cyber security measures in place to ensure they don’t pick up a virus on their laptop, due to their home network not being protected by a firewall.
There has been a considerable increase in support tickets raised, per customer, compared with pre-COVID levels, with almost all of this increase being due to hybrid working environments and the need for our customers to be able to provide their staff with these essential tools no matter where they are working from.
5 - Microsoft price changes
Microsoft 365 has taken the world by storm, with over 270 million active users on Microsoft Teams worldwide. Hailed as the ‘digital king’ for its extensive suite of office based services, Microsoft is one of the most established digital product suites in the world.
From Word to PowerPoint and all the dynamic working solutions in between, Microsoft have brought us products that have become an integral part of our work lives over the years, along with new additions that we now can't imagine working without.
Last year, Microsoft announced a significant 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, and integration of other products into teams have kept business moving in the post Covid world.
What can you do? How can Lily help?
We are digital transformation specialists, and we believe that our leading-edge products and services can support your business through challenging times.
Upgrade your products.
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.
Embrace the digital revolution
Digital transformation is at the heart of what we do. By integrating technology into all areas of business, and therefore evolving the way you operate and deliver service to your customers allowing you to thrive, grow and stay one step ahead of the competition.
Digital Transformation enables you to embrace intelligent, tech-facilitated systems across your business operations thus helping you find efficiencies, generate more revenue cash and ultimately profit.