Inflexible business contracts a major roadblock to UK economic recovery and growth

• More than two in five (42%) senior IT managers view signing multi-year contracts as “risky” in the current climate and nearly half (44%) of those looking for IT support say they’re paying for services they don’t need
• 94% believe that investment in new digital services will help their businesses bounce back from Covid-19
• But there’s a long way to go, with more than half (57%) not believing their business is agile enough

30 June 2021 – Lengthy and inflexible contracts are preventing businesses from bouncing back from the pandemic, according to new research from Virgin Media O2 Business.

The study has found that almost half of senior IT managers (44%) looking for support say they are locked into restrictive contracts and paying for services they don’t need and a third (36%) say renegotiating fixed-term contracts is a barrier to operating more flexibly and making bold decisions over the next 18-24 months.

The research coincides with Virgin Media Business’ launch of ‘UltimateFlex’, a new contracting model for wholesale services which offers customers anytime cancellation as standard for managed ethernet, internet access and high capacity services.

The survey reveals more than 9 in 10 senior IT managers believe investment in new digital services will help their business bounce back from Covid-19.

However, almost three in five (57%) do not believe their business is agile enough and say it is unable to flex tools and infrastructure or make swift decisions in response to changing conditions.

Almost half (47%) of those looking for IT support say that committing to long-term contracts involves significant upfront fees which their business cannot afford while 42% see signing up to multi-year contracts as risky in the current climate.

To help businesses get back on their feet, Virgin Media Business has also removed installation charges as standard on wholesale products as part of UltimateFlex, meaning almost all circuits can be booked with nothing to pay upfront. The operator has also removed excess construction charges, helping partners reduce risk and manage cashflow with no unexpected upfront costs.

More than two in five (43%) senior IT managers who would like more support from their connectivity provider want the flexibility to end contracts with partners penalty-free, citing it as one of the most important things they could do to support future growth over the next 18 months.

With the operator’s UltimateFlex contracts, wholesale partners have the confidence they are always receiving the best price for life – as pricing for installed services is automatically adjusted in-line with the latest acquisition offers.

Mike Hallam, Director of Fixed Wholesale at Virgin Media O2 Business, said:

“Businesses are crying out for more flexibility, certainty and value to unlock the power of digital technology and bounce back stronger.

“After a bruising year, we’re giving partners a leg up with our radical new model which abolishes upfront fees, provides lifetime price confidence and comes with anytime cancellation so they have the tools they need to thrive whatever comes next.”

Virgin Media O2, which launched in June 2021, is a new joint venture between Liberty Global and Telefónica in the UK. The new business has become one of the UK’s largest, with 47 million connections across broadband, mobile, TV and home phone, and offers connectivity services, applications and digital solutions to tens of thousands of UK businesses and public sector organisations.

While there is no change to existing services today, plans are well underway to offer seamless broadband, entertainment and mobile services all in one place, under one roof, later this year. Through a dedicated function, business and public sector customers are set to benefit from a richer suite of products and collective expertise from Virgin Media O2 Business. This includes a variety of managed connectivity services and flexible working capabilities, security, data insight, 5G private networks and cloud solutions, as well as wholesale services to other operators and partners.

–ENDS–

Notes to editors

The survey, conducted over one week in May and June 2021 by Censuswide, consulted 250 senior IT decision makers from UK organisations of at least 50 employees.

Virgin Media Business recently announced its plan to transform the wholesale connectivity market by enabling partners to take wholesale ethernet, Dedicated Internet Access (leased line) and High Capacity Services (HCS) on a cancel anytime, flexible contract. Read more about UltimateFlex here.