Bizstartup.ie - NewsTelecoms start-up targets SMEs with lower cost offering

Founders Declan Kavanagh and Kieran Mageean met at a networking event through the Irish Internet Federation and together spotted a gap in the market. Kavanagh has 20 years’ experience in the financial and telecoms sectors and Mageean is an electronic engineer, having worked for 25 years in the telecoms sector.

Ways to reduce costs during a recession

“We were entering into the recession at the time and could see that what companies were looking for were ways to reduce costs. Eircom wasn’t moving on price and had 69pc of the fixed-line market, valued at €2 billion. Everyone was focused on the residential market or large corporates and we felt SMEs were traditionally ignored,” says Kavanagh.

Buzz can reduce companies’ bills by at least 20pc, and up to 70 or 80pc, he continues. “Some 90pc of companies are not aware that every single call with eircom has a minimum charge. It comes as a shock to most of them. Our research found that 15pc of all phonecalls made last less than 5 seconds. We have no minimum call charge and no connection fees.”

Running live after three months of business planning

Kavanagh and Mageean sat down in March 2009 to start the business and it was up and running with live customers within three months.

“We funded it personally, planned it out and did our market research. Informal focus groups showed that small businesses felt neglected and were unhappy with the customer service from big multinationals. We decided to cut costs but enhance the customer experience. Buzz is the only telecoms company in Ireland with 24-seven, locally-based customer service. We aim to be the small business champion.”

Every month Buzz emails customers their entire bill accompanied by analysis showing every phone number, who dialed it, the cost of the call and so on.

Routes to building more business

“A lot of customers find this good for determining cost allocation per department or for managing sales team productivity – they can see who is using Tarot lines for example. Everything is laid bare,” says Kavanagh.

To build up business, Buzz has developed an affiliate scheme where it links up with companies that sell computers, stationary or office furniture, for example. “We engage in direct selling but are actively looking for channel partners to make sure we’re not tied up knocking on doors,” says Kavanagh.

A view to expand to Northern Ireland

The business is growing month-on-month and Kavanagh says Buzz is looking to expand in the UK and Northern Ireland.