What goes up must come down
Getting to grips with the cost of mobile data
We’ve all heard horror stories
about holidaymakers who come
home to find a shockingly large
mobile phone bill, which costs...
Why mobile bills are rising
The first reason is simple. We are using
more data than ever.

The shock of the bill
Roaming i...
Second, data is expensive.
International data roaming in the European Union grew
by 630 per cent during 2007-2012 while th...
Practical steps to
managing mobile costs
The first step is to get to grips with your spending, identify
and understand you...
BT’s TEM team recently helped
French company Areva secure
mobility savings of up to 45
per cent. You have a significant
op...
TEM easily pays for itself. Larger organisations often have
complex bespoke tariffs, where rate card mistakes can
easily g...
Conclusion: control your data,
cut your costs
When it comes to big mobility bills, data is the primary
culprit. Not voice ...
An experienced practitioner
of mobile working in our
own business, BT provides
network-independent services
that help you ...
Offices worldwide
The telecommunications services described in this
publication are subject to availability and may be
mod...
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What goes up must come down: Getting to grips with the cost of mobile data

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Data costs are coming down, but your bills go up because
you are going to consume even more data. Getting data
consumption under control will bring your mobility costs
under control.
For more information on Managed Mobility Expenses, please visit: http://www.globalservices.bt.com/uk/en/products/managed_mobility_expenses

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Transcript of "What goes up must come down: Getting to grips with the cost of mobile data"

  1. 1. What goes up must come down Getting to grips with the cost of mobile data
  2. 2. We’ve all heard horror stories about holidaymakers who come home to find a shockingly large mobile phone bill, which costs almost as much as their flights. The problem is that much as we love to catch up with news, and text photos to friends back home, many of us do not realise how much it is going to cost. And when you are a large organisation whose employees depend on their smartphones and tablets to connect and work around the world, that problem rapidly multiplies. Getting to grips with the cost of mobile data 2
  3. 3. Why mobile bills are rising The first reason is simple. We are using more data than ever. The shock of the bill Roaming is dominated by business users1. Gartner says that “roaming charges for some enterprises can, on occasion, represent a larger cost than their global widearea network bill... some companies are struggling with annual bills upward of $20.4 million (€15 million) just for the roaming element2”. In a report from iPass, 43 per cent of remote workers reported an expensive data roaming bill, with an average ‘bill shock’ of €8453. The irony is that the cost of mobile voice and data has come down. In July 2013, the EU put its foot down over roaming charges. Anyone who travels in the European Union now pays fixed charges for voice calls and data consumption. And mobile operators elsewhere are responding to our appetite for mobile data with new price plans and tariffs. So why does the corporate mobile bill just keep going up? No one today is going to argue about the business benefits of more mobile people and processes. That stable door is firmly shut. But internal billing and management processes have not yet caught up with the reality of global mobility. The really bad news is that pain is only going to get worse with the roll out of 4G, the next generation of wireless technology. In this paper, we look at why your mobile costs are increasing and suggest practical steps to get them under control, before they start doing real damage to your bottom line. 2012 saw more mobile traffic than all preceding years combined. By 2017, according to AT Kearney4, data traffic globally is projected to grow by 66% p.a. to 11.2 exabytes per month (one exabyte is one billion gigabytes). That’s more than five billion hours of high definition video5. Most of us don’t need statistics to tell us that we are hungry for data. We know from our own experience. IBM says the typical mobile user reaches for his or her phone 150 times a day6. We check messages 23 times, social media nine times and news on six occasions7. The more apps we download, the more we use our smartphones and the more we consume data. Whenever switched on, our business phones are constantly polling, busy updating apps, downloading emails and messages and gobbling up data round the clock. And while that’s all very well when we are covered by our local plan, as soon as we exceed our data plan or travel to another country, then charges start to rocket. As 4G arrives, we will consume even more data than we do already. 4G mobile is around five times faster than our current third generation technology. Network download speeds will increase from approximately 3MB per second to 42MB per second. The experience of using 4G is pretty much like using your home broadband – so fast you don’t even notice it. For a roaming user, that is very dangerous. Simply watching a streamed video may end up costing hundreds of pounds.  4G is already in extensive use across the US where experience suggests that users consume twice as much data than on 3G. Roll out of 4G is twice as fast as 3G and will reach around 60 percent of the world’s population by 20188. It’s coming to your business sooner than you think. The Mobile Economy 2013 GSMA/AT Kearney www.atkearney.com/ documents/10192/760890/The_Mobile_Economy_2013.pdf 5 ibid 6 www.ibm.com/mobilefirst/us/en/bin/pdf/wsj0429opad.pdf 7 ibid 8 www.ericsson.com/res/docs/2013/ericsson-mobility-reportjune-2013.pdf 4 www.ericsson.com/res/docs/2013/ericsson-mobility-reportjune-2013.pdf 2 Reducing Costs for Global Mobile Voice and Data Roaming Gartner 14 March 2013 3 www.computerweekly.com/news/2240187245/Mobile-operatorscut-roaming-costs-across-Europe 1 Getting to grips with the cost of mobile data 3
  4. 4. Second, data is expensive. International data roaming in the European Union grew by 630 per cent during 2007-2012 while the average price per MB decreased9. In the EU, we now pay €0.45 per MB (€0.20 from July 2014). So 35MB of data per day now costs €15.75, instead of the €245 it could have cost in 201210. However, outside the EU charges can be as high as €8 per MB11. With a smartphone user’s average monthly data consumption rapidly approaching 2GB12, it is easy to run up big bills. Outside the EU, simply using your smartphone to find a good local restaurant could cost you as much as the meal itself. Third, data tariffs are complicated. Complex charging plans, bundles and allowances make it hard enough for the individual user to correlate usage with cost. But for any organisation that operates in more than one country (and today, that means pretty much most businesses), this complexity is staggering, with multiple contracts and tariffs from different mobile operators. Local operating units renegotiate local contracts. Mobile operators are constantly revising charges. To say it is hard to understand what you have contracted for and if you ibid europa.eu/rapid/press-release_IP-13-611_en.htm 11 www.pcadvisor.co.uk/how-to/mobile-phone/3270437/takingiphone-abroad-avoid-data-roaming-charges/ 12 www.frost.com/prod/servlet/press-release.pag?docid=283753743 are paying the right amount is a real understatement. Few organisations have a single view of their mobile spending. Finally, even if users and their employers actually do understand roaming tariffs, it’s hard to measure data consumption. We understand tariffs for voice calls: they cost so much per minute and we can work out how much each call costs. But we struggle to quantify data consumption. How much data can I buy for €0.45? An email? A file download? What does a five minute Skype call cost? Also, a lot of data consumption takes place silently, without our intervention. As soon as our phone is detected by the overseas network, it will connect and begin to download messages and update apps without any help from us. Apparently 66 per cent of British people fail to turn off roaming when they travel and only 15 per cent understand the potential costs13. Individuals increasingly depend on their smartphones and businesses increasingly depend on their mobile employees. Our thirst for data will continue to grow and so will our bills, unless we take practical steps now to understand, control and manage costs in the future. 9 10 Getting to grips with the cost of mobile data www.uswitch.com/mobiles/guides/mobile_roaming_charges/ 13 4
  5. 5. Practical steps to managing mobile costs The first step is to get to grips with your spending, identify and understand your costs. Which is easier said than done. Mobile invoices are horribly complex and you have a lot of them. Building a single picture of corporate spending is a huge administrative and analytical job. In its 2011 study into the corporate costs of international roaming, Aberdeen Group found that on average, respondents received bills from at least four carriers and received 495 wireless-related invoices per month for the usage and purchases associated with more than 5,000 devices14. You probably don’t even have all the information in one place. You almost certainly don’t have people with the time and the knowledge required to analyse thousands of mobile phone invoices, let alone check them against your contracted tariffs. It is even possible that you don’t actually know what you have, in terms of mobile devices and associated contracts. One of our multinational customers that told us it had 8,000 phones. In less than one month, the BT team uncovered 12,000 devices, meaning the customer’s mobile spending was roughly 50 per cent higher than it thought. The solution is Telecom Expense Management (TEM). A TEM solution can be DIY, a bespoke or off the shelf software solution, or provided by a third party as a managed or outsourced service. A simple TEM solution can give you an overview of your telecom spending. A more sophisticated TEM service looks at all your mobile bills, at the level of individual users; it checks individual bills against the contracted tariff, identifies overcharging or other errors and manages disputes with the mobile operators. Given the complexity of mobile bills, it is not surprising that mistakes are common. Aberdeen Group reports that 48 per cent of companies found errors on one or more bills every month and 10 per cent indicated that over a quarter of their bills had errors15. Wireless expense management, Aberdeen Group 2011 ibid 14 15 Getting to grips with the cost of mobile data Once you know what you are spending, TEM services can make sure that your users are on the best usage plans and help you renegotiate with the network operator to secure more competitive and appropriate tariffs. In our experience, purchasing and procurement of better mobile tariffs can reduce your overall costs between five to 20 per cent.16. For example, by negotiating with mobile operators on the customer’s behalf, BT secured for one customer a 15 to 30 per cent reduction in global contracted rates across numerous operators, saving the business around €1.5 million annually. TEM users get detailed information about mobile usage, which helps you to build a complete picture of how you consume mobile services across your organisation. Find out who your high spenders are, and why. Track spending by groups of users, job functions or types of device. Maybe you need to change the data plan, or persuade users to modify their behaviour? You can also monitor the impact of new technologies (such as 4G) or policies such as BYOD in order to take more informed decisions about how to organise your mobile communications. Keeping track of potentially thousands of mobile devices across the business is a real headache. TEM can also help you look after your inventory, from acquiring new devices, upgrading them and managing them through to redundancy. The latter is often overlooked. One of our audits for a customer discovered 100 unused BlackBerry SIM cards stored and forgotten in a safe. The company had been paying €20/month for each SIM for two years. And nobody realised. www.globalservices.bt.com/uk/en/products/managed_mobility_ expenses 16 5
  6. 6. BT’s TEM team recently helped French company Areva secure mobility savings of up to 45 per cent. You have a significant opportunity to make some meaningful cost reductions. Getting to grips with the cost of mobile data 6
  7. 7. TEM easily pays for itself. Larger organisations often have complex bespoke tariffs, where rate card mistakes can easily go undetected. The more mobile contracts you have, the more likely there will be errors – and the greater the payback from TEM. Our experience suggests billing errors of five per cent of the total cost of ownership are not unusual for a company with 4000 handsets. BT’s TEM team recently helped French company Areva secure mobility savings of up to 45 per cent. You have a significant opportunity to make some meaningful cost reductions. The best results come from letting TEM specialists do the job for you. In the words of industry commentator Current Analysis: “Enterprises that attempt to do spend analysis and optimization themselves, or even with the help of internally managed software solutions, often fail; the use of third-party fully managed TEM solutions is warranted, especially for MNCs with multiple carrier relationships17”. There are many TEM providers, including mobile operators themselves, who have to be willing to uncover their own billing errors to customers. (Roaming charges typically account for 10 per cent of telco revenues and a higher proportion of profits18.) TEM mainly deals in historic data. Once you know what you are spending and why, then you can begin to take steps to control future expenditure by introducing and enforcing mobile usage policies. The second step is to manage usage in real time, to prevent users from running up excessive costs in the first place. Live data monitoring apps are growing in popularity with individual smartphone users. Apps such as Mobidia’s My Data Manager help individuals to monitor and understand their data consumption in real time. You can set alerts when you approach your plan limit, and so decide if you want to exceed the plan and accept additional costs. Such apps tied into the TEM platform will produce a rich stream of data to feed into the TEM analytics. You can use this information to alert the user, offer alternative connectivity or cut the connection to avoid unnecessary costs. Telecom Expense Management: High Growth Potential, but a Fragmented Market Market Advisory Report June 15, 2011 18 www.telegraph.co.uk/finance/newsbysector/ mediatechnologyandtelecoms/telecoms/10297288/EU-to-pressahead-with-laws-to-scrap-mobile-roaming-charges.html 17 Getting to grips with the cost of mobile data The main aim of mobile data management (MDM) is to secure your corporate data and applications in a mobile environment, but MDM can also contribute to cost control by controlling the user’s device. For example, MDM can restrict the user to certain applications, or switch off international roaming. MDM helps you to enforce strong corporate usage policies which can actively reduce usage and deliver savings19. Your third step is to reduce costs by providing alternative connections for international users such as services that seamlessly merge mobile and fixed line networks. Using the fixed data network for all or part of voice calls is cheaper than using the mobile voice network and can save you over 45 per cent on your mobile costs20. A connectivity solution such as BT MobileXpress can help manage costs by automatically choosing the best/ cheapest data connection; the employee who moves around a lot doesn’t even have to think about how to connect. In addition, cross-platform instant messaging is growing fast, and offers cheaper communication than SMS. Analysts expect 2.1 billion smartphone users to be communicating via services such as WhatsApp, Skype and WeChat by 201721. www.globalservices.bt.com/uk/en/products/managed_mobility_ expenses 20 www.globalservices.bt.com/uk/en/products/one_voice 21 www.mobilesquared.co.uk/media/31431/Operator-survey-OTTblows-up-mobile-universe_White-Paper_2013.pdf 19 7
  8. 8. Conclusion: control your data, cut your costs When it comes to big mobility bills, data is the primary culprit. Not voice calls. Our appetite for data will only grow, as we come to depend on smartphones and apps at work as well as in our personal lives. 4G will make it even easier to gorge ourselves. So, get to grips with your costs. Ideally, find an independent TEM provider who will do it for you. Introduce and enforce mobile usage policies. Use new technologies to provide your users with alternative ways to connect and communicate. Data costs are coming down, but your bills go up because you are going to consume even more data. Getting data consumption under control will bring your mobility costs under control. The way we work and travel is changing fast and the future will be data-rich. Now is the time to put in place the disciplines and processes that will let us make the most of it. In our experience, purchasing and procurement of better mobile tariffs can reduce your overall costs between five to 20 per cent. For example, by negotiating with mobile operators on the customer’s behalf, BT secured for one customer a 15 to 30 per cent reduction in global contracted rates across numerous operators, saving the business around €1.5 million annually. Getting to grips with the cost of mobile data 8
  9. 9. An experienced practitioner of mobile working in our own business, BT provides network-independent services that help you control mobility costs, implement policies and introduce good practice. For further information please contact jonathan.bates@bt.com. Getting to grips with the cost of mobile data 9
  10. 10. Offices worldwide The telecommunications services described in this publication are subject to availability and may be modified from time to time. Services and equipment are provided subject to British Telecommunications plc’s respective standard conditions of contract. Nothing in this publication forms any part of any contract. © British Telecommunications plc 2014 Registered office: 81 Newgate Street, London EC1A 7AJ Registered in England No: 1800000 PHME xxxx

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