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Ringing Up Costs

15 November 2006

As mobile phone fleets, mobile services and applications grow so do the costs to individuals and businesses. Frank Booty looks at the mobile voice and data market and how costs can be contained

MANY ORGANISATIONS IN THE UK provide employees with mobile phones as empowered mobile working is seen as critical to productivity and flexibility. Mobile phone fleets often comprise hundreds or thousands of devices. As a consequence of new mobile services like procurement, enabling people to buy items using mobile phones, and the trend for mobile working, mobile expenditure is forecast to reach 50 per cent of most organisations’ total telecom spend in this decade.

The Western European market for enterprise mobile data systems for business users might reach €10bn by 2011, according to a new report, Scenarios for Enterprise Mobile Data Services 2006–11, published by Analysys, global adviser on telecom, IT and media (

This growth will primarily be driven by companies’ desire to improve responsiveness to customers. Despite uncertainty within the industry about how this market will develop, the report from Analysys identifies significant roles for applications specialists and hosting companies, as well as for mobile network operators.

Data growth
Data service revenues will account for over 50 per cent of the market for enterprise mobile data systems, which could grow with a CAGR of 13 per cent to 2011. “The compelling reason for adoption of mobile data applications is that enterprises aim to differentiate themselves and gain competitive advantage by improving responsiveness to customers,” says report author, Margaret Hopkins, “But it’s not yet clear how much time and money they’ll be willing to invest in trials and application development.”

Two broad types of application are in use, says Hopkins:
● workforce management systems which involve transactions sent to always-on PDAs and which can easily be supported by 2.5G networks but require significant investment in integration
● collaboration tools which are based on e-mail and which will test the bandwidth capabilities of 3G and mobile broadband.

This summer, BroadGroup Tariff Services, a pricing and tariff services research and consultancy company, and a member company of BroadGroup consultancy, launched Mobile Pricing News – touted as the only newsletter focused on voice and data pricing in the mobile sector in Europe. MD of London-based BroadGroup Tariff Services, Margrit Sessions, says, "Until now, there’s been no single source for voice and data pricing in Europe. Mobile Pricing News provides that much-needed reference point. We’ve launched this weekly newsletter in response to requests from clients worldwide who are looking for clear and easy to access pricing information covering the whole of Europe."

Pricing information
Key areas covered in each issue are: GSM voice, international/roaming, incentives and promotions; fixed/mobile convergence; data services; and content services.

"We're giving telecoms tariff specialists and regulatory bodies the latest up-to-date information in an accessible format,” says Sessions. “We’re also committed to providing a wider forum for discussion and debate on hot topics in pricing. We ran a successful summit in the UK in July on mobile pricing and will run further events.

“Some companies have no restrictions on the usage of mobile technologies,” she continued. “Others will have limitations, but not on voice. Today you can roam on voice in Europe and the US relatively ‘cheaply’ but data roaming is a different picture. There are not enough agreements in place yet and the pricing is very high. Here, companies have to educate staff to use data roaming only when it’s really necessary. By the end of 2006, operators are committed to derive 25 per cent of all their revenues from data. Other factors driving the mobile data market include falling fixed voice revenues per user, the huge success of SMS and ring tones, and enhanced device availability with increased functionality – voice, images, text and video – although most users today are storing photos rather than sending them.”

Mark Chapman, Commercial Director, ttMobiles, says, “UK organisations lose £990m a year in un recovered personal use on mobiles. Many organisations find the cost of recovering personal use prohibitive using cheque and paper processes and allow reasonable personal use. But companies could be in breach of VAT regulations be exposing their users to benefit in kind taxation. With corporate mobile usage growing annually and being driven by new applications and work practices, without controlling usage and tracking mobile assets, costs will continue to escalate at a quicker pace than reductions in mobile unit costs.”

ttMobiles solutions allow companies to understand, manage and control mobile use for the purposes of reducing costs, removing internal resource requirements and enabling compliance with VAT and tax requirements. “As an independent mobile management company, we provide objective cost control, management and visibility across a business’s complex mix of mobile devices, services and providers,” says Chapman. “Consequently the cost saving on total mobile expense is between 20–35 per cent.”

According to T-Mobile research in early 2006, some 32 per cent of the SMEs surveyed had not looked at their mobile costs for over two years.

It’s not all about mobile phones, of course. The number of gizmos out there is staggering. As well as the phone, the most popular include the PDA (personal digital assistant), laptop, data card, tablet notebook, safeguard (ie. memory stick), plus various other items like sat-navs, recorders for iPods and units to link to Blackberry devices to enable presentations to be displayed on a monitor or through a projector.

All this lot is intended to make the lives of the mobile workforce better balanced, as well as increase productivity. Customers and partners can be met at the location of their choosing while the mobile worker still feels connected to the office. Well, that’s the theory. Meanwhile, restrictions on taking stuff into aircraft cabins may have been eased, but laptops are still being carefully screened. And you can’t take as much with you as hitherto. Checks are necessary if you’re going abroad as there are still bans with certain countries. Being a road warrior in the departure lounge is subtly different to what it used to be.

Easing the mobile management headache at Allen & Overy
Mobile phone management company, ttMobile, has taken the pain away from managing the network at leading international law firm Allen & Overy. With 4,700 staff in 25 major centres globally, and 1,700 mobiles which include Blackberries and datacards, it had become an administrative headache for the company to manage internally and A&O looked to ttMobiles for the remedy.

Andrew Brammer, Head of Global IT Operations, Allen & Overy says, “We chose ttMobile as a company that was committed to work with us, was independent of the network provider and had a track record of delivering similar solutions to other customers.”

Implementing ttMobiles Wireless Expense Manager has not only freed Allen & Overy’s own internal managers from the problem, but also improved asset and cost management. The paperless management service enables it to keep track of the mobile devices itself, as well as the cost of the calls – both business and personal – and then to integrate into the company’s internal payroll and accounts system.

Lawyers allocate calls online to personal, business or client, eliminating the paper and improving cost recovery. Each month files for each element are provided for Allen & Overy to integrate into the payroll and accounts system for recharge. Individual profiling of calls, address books and call summary viewing (as opposed to itemisation) has minimised the amount of time lawyers need to spend in allocating calls. The online solution has put a stop to paper invoicing for end users and cost centre managers.

The monthly VAT report makes compliance easy by detailing the VAT element and ensuring the correct apportionment figures for business and personal use. Each month a VAT file is provided with total personal call declarations. Other benefits include monthly network invoice validation against the agreed contract, and identifying and crediting invoice errors. Ongoing support includes tracking of usage patterns and database

ttMobile’s Chapman, says, “Most companies can save over a third of their mobile costs by introducing one of our management systems – but for Allen & Overy it’s not just been about cutting costs, but about managing those costs. For many companies more efficient reporting mechanisms – to allocate charges for business and personal calls, as well as VAT compliance – are just as important.”

More info
Mobile Pricing News is published weekly and distributed by e-mail in pdf format to clients globally.

● Frank Booty is a freelance writer

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