Small businesses are being urged to fix their telecoms contracts as the industry could be going through a period of price rises.
Unicom says that the telecoms industry is likely to follow a similar pattern to the energy market.
Chris Earle, operations director at Unicom, says that following deregulation there are three phases that a utilities industry will go through after deregulation.
He says that the first phase is the ‘customer grab phase’ when a large number of companies fight for market share, which forces the prices down for customers.
The second phase is the market consolidation phase where companies merge and the bigger suppliers buy out the smaller companies and prices stay low.
Then there is the third phase, when the larger suppliers try to make profits out of the customers they have acquired, which involves price rises for customers.
The gas and electricity markets are well into the third phase, with a handful of companies supplying the vast majority of customers, and prices going through the roof.
However, he believes that the telecom industry is currently going from phase two to three, so now is a good time to fix prices.
Chris Earle, operations director at Unicom, said: “The same trend is happening within the telecoms sector as has happened in the energy market.
“There have been increases from all the energy suppliers over the last two years as the market has consolidated, and the providers have become fewer - wholesale prices have gone up for both gas and electricity but the suppliers have increased their prices to customers much more than they have had to.
“The same is now happening with the telecoms market.”
© Crimson Business Ltd 2006