No corner of enterprise spend is immune to inflation – including business wireless costs. Carriers like AT&T and Verizon have raised fees in recent months to head off inflationary pressures as well as “motivate” customers to switch to newer plans. But as the wireless carrier market becomes less competitive (it’s essentially a three-carrier marketplace), many enterprises are wondering how they can get a handle on rising wireless costs.
The timing for enterprise wireless savings is important. Many CIOs are helming ambitious business-critical initiatives without corresponding increases in IT budgets to support them. Companies need those budgets to stretch further now. Gartner recently revised its worldwide IT spending growth forecast for 2022 to 3% from 4% earlier this year, and while the fluctuation isn’t dramatic, it underscores the need for IT buying teams to take a zero-tolerance approach to IT and telecom cost management.
How to Achieve Fast Savings on Enterprise Wireless Costs
One of the biggest mistakes enterprise customers make when looking for ways to reduce wireless costs is assuming savings can only be achieved during wireless carrier contract negotiations. Businesses often wait until their cellular carrier agreement is close to expiration to review costs and look for potential savings. While strong renewal negotiations can often generate significant credits and potential for up to 15% savings in monthly service costs, it’s not the only path to savings.
Here are three actions enterprise customers can take today that may also generate 15% savings or more on a large cellular footprint:
1. Examine Zero Use Subscribers. AT&T Mobility and Verizon Wireless billing portals make it easy to run a “zero-use” report. If it can’t be run through the billing portal, customers can ask their account team to generate the report for the prior 90 days. The report shows every subscriber that has not used their device for a voice call, text message or data during the past 90 days. Enterprise customers should take immediate action to contact the subscriber to validate their need for cellular service and immediately move the device to a vacation/suspend plan. The average cost of a smartphone is more than $50 per month. Finding just 100 zero-use devices in a 2,000-line account amounts to a 5% savings – more than $60,000 annually.
2. Examine Data Usage on Pooled Plans. Although carriers are reverting to the “unlimited” data plan model, many enterprise customers are still subscribed to pooled data plans. Enterprise customers should review their invoice to see if they are being charged for data usage. This is a charge for consuming more data than is contributed to a pool for usage. In the above example of 2,000 subscribers, if each subscriber is on a 3Gb shared use pool plan, then the total data pool available to the client is 6,000Gb. If the client uses 10% more, or 6,600Gb, the extra 600Gb will be charged at $10/Gb or $6,000. Again, if those subscriptions are costing $50/month or a total of $10,000, then the excess data is costing 6% of the monthly cost. The excess charge can be eliminated by moving 100 of the subscribers to a 10Gb shared data plan. This will add 700Gb to the pool (100* (10Gb-7Gb)= 700) and brings the total pool to 6,700. This provides a small buffer to prevent further overage charges. The cost difference between the 10Gb plan and the 3Gb plan is less than paying the $10/Gb.
3. Examine International Usage, Plans and Features. There are other portal reports that will generate data regarding international usage. Enterprise customers can also request their account team generate reports regarding international usage, plans and features. There are a couple costs to examine. The first are subscribers that have extensive and repetitive international usage but are not subscribed to a plan or feature to reduce the cost of international usage. The second are subscribers that have an expensive plan or feature but never travel internationally.
Note: It is important to know the difference between a plan and a feature. An international plan is a monthly subscription that covers both domestic and international usage. These are the most expensive plans since they typically include a large bucket of minutes, messages, and data that can be consumed either domestically or while travelling abroad. However, they are cost effective for users that frequently travel international. An international feature is simply added to a domestic plan. It is harder to give savings examples, but it is not hard to imagine an executive that travels abroad and generates $800 in usage charges because they did not have an associated plan or feature.
Significant Wireless Savings that Deliver an Immediate Impact
Any time is a good time to cut enterprise wireless costs – the effort shouldn’t be reserved only for carrier contract renewals. Enterprise customers can take the above steps today, regardless of contract status. The savings achieved can be significant and deliver an immediate impact on helping the business make the IT budget go further. These “clean-up” steps can also help enterprises prepare for a carrier agreement renewal on the horizon. Either way, if you haven’t taken these steps in the last 18 months, now is the time!
Are you looking for non-disruptive ways to cut enterprise wireless costs? NPI can help. Contact us today.