Negotiating a great new mobile contract is the best way to save money on mobile, right? Most large organisations and procurement teams think so, however, in practice many never get to see projected cost savings converted into cash over the term of their mobile agreement.
In this article, we explore a few of the key reasons that this happens, and also offer pragmatic strategies on how to increase your chances of keeping those savings in your bank account and not your mobile network’s.
Understanding your mobile usage data and trends
The thing about mobile billing is that often there is a lot of data, and unless you’re skilled both at analysing and interpreting data from across many months of bills, then you’re not likely to gain a deep understanding of how your people use their phones.
Most businesses don’t have one or more of the time, skills or resources to complete such detailed analysis, and so they take a snap shot of data and base their mobile contract negotiations, analysis and savings forecasts on that sample data set. This is fine for looking at top-level usage and connection numbers, however it doesn’t highlight the anomalies or different underlying usage profiles that might be creating excessive costs. It also doesn’t take into account what might happen if usage profiles and needs change over the term of the contract.
For most businesses, detailed analysis is going to find a range of hidden issues, for example:
- Unused services that can be removed or excluded from negotiations
- Users on the wrong tariffs or not receiving value from the tariff or allowances
- Excessive usage that could be managed or addressed via different commercial terms
- Infrequent or low usage of devices and connections that may be better suited to BYOD or other technologies
- Changing data usage profiles that will materially impact future allowances and costs
Without the insights and understanding that come with detailed analysis, negotiations tend to revolve solely around the headline rental prices for each connection and for areas like shared data allowances. However, in practice these aggregate numbers often hide material wastage as well as excess costs and usage, that are likely to be inadvertently locked into commitments as soon as the new agreement is signed.
The Devil is in the detail for roaming & international calls and data usage
All mobile networks use different very roaming zones to create their tariffs, and each has very different charging models. For example Vodafone treats data usage in Morocco within its Business Traveller £5 per day roaming plan, however EE treats this as rest of the world (often charged at £3 / MB). Some plans have data usage limits of 5, 50 or 500MB per day others do not. To really understand the impact of these tariffs and to compare one supplier with another, it is necessary to not only analyse where usage has been incurred (and ideally over an extended period of time), but to also understand the exact amount of data used and the number of roaming user days, calls and messages used in each country. The same applies to charges for UK to International calls and for calls to services numbers (e.g. 084/087/Premium).
For all but the most proficient analysts, this is a time consuming and complex challenge and requires a detailed understanding of how mobile networks charge and bill for services. In most cases, this is type of detail is either ignored completely or it is assumed that cost will be broadly similar. However in many cases these variances can account for vast differences in the long term costs, and in extreme cases can completely erode all projected savings when comparing two suppliers. In short, the devil really is in the detail, and if you don’t have this detail and your business roams regularly, then you’re likely to be basing procurement decisions on flawed data.
Changing usage profiles and exceeding allowances
Businesses often rely on static snapshots of data and use these in spreadsheets to compare different vendors side-by-side, as this provides a convenient comparison model. These spreadsheets assume that the current state will persist over the term of the agreement, or at minimum supplier charges will be pro-rata to any increase or change in usage.
This is a fundamentally flawed assumption; however the impact of such analysis only comes out much later on, once the new agreement is in place. For example each of the mobile networks has very different policies and billing rules in place to manage changes to tariffs or data plans. Some are automatically adjusted quarterly, some default to much higher rates when allowances are exceeded and can only be changed by a contract amendment. Some have upward only increases, and so if you increase the allowance mid term to address temporary increases in usage, you are locked into that new higher allowance and cost for the balance of the term of the agreement.
Unless your business knows exactly what the impacts of changing data usage will mean for your bills, and importantly how it can deal with such changes, then again projected savings can simply be wiped out from even relatively small changes in usage profiles.
New Technology and changing needs
Since covid-19, the that way people use their corporate mobile phones has changed significantly, and typically about 10-15% of users simply don’t use their phone, and a further 20-30% us their phone infrequently. Given this change, businesses are increasingly challenging whether the business needs to be issuing mobile phones in the way that it used to. At the same time, the use of MS Teams means that people simply don’t make mobile phones calls as regularly as they sued to. For context, if yours is a typical large organisation then about a third of users didn’t make a single mobile voice call last month, and you probably paid for an unlimited voice plan.
The mobile networks know this, which is why often they almost mandate unlimited voice plans; however for many businesses could the use of Teams simply be a better and more cost effective solution to providing some of their users with telephony on their mobile?
Furthermore with MS Mobile Application Management (MAM) its easier than ever to support BYOD in any way that secures corporate data without infringing on the privacy of the user on their personal device. Given this, many businesses are considering BYOD as an alternative to corporate issued devices for some users.
Procurement processes that don’t factor into account these changes in technology are likely to lock in connections and commitments that will act as barriers to adopting these changes. However in many businesses the procurement function has little or no strategic plan for mobile, and so they simply negotiate for broadly the same mobile services but ideally at a lower price, missing or precenting material future savings in the process.
Commitments and terms
When negotiating prices with mobile networks, most businesses focus on the headline prices, however they don’t seek to establish the exact spend or connection commitments that will accompany these prices. The mobile networks equally often don’t share these details until all aspects of the deal in terms of connection numbers and allowances are “locked-in”. For many, this means that they don’t establish until it is far too late in the day, that the network is locking in all their spend for the entire term of the agreement.
It’s also often too late to renegotiate effectively, as the mobile network knows they have all the leverage, especially in the case of a renewal. All too often those commitments simply remove the ability to optimise the estate over the term or adapt to change or to adopt new technologies and services that are better suited to their needs.
In this article, we’ve touched upon a selection of the key mistakes to avoid when negotiating mobile contracts, however there are many more elements to consider including the challenge of funding device purchases and the implications of mobile “technology funds”.
In conclusion however, successfully navigating mobile contract negotiations requires a strategic and insightful approach, and at the heart of that is understanding your data and building in the flexibility to adept to change. Negotiating a low cost price for headline rates and shared data allowances is the easy part, and it’s what the mobile networks want you to focus on. Negotiating around the detail and challenging the impact of change is where the savings are really delivered or lost over the term of your agreement.
By steering clear of common mistakes like ignoring detailed analysis, not modelling changing usage or failing to negotiate commitments up front; businesses can crack the code to more resilient and cost-effective mobile contracts. This approach ensures that negotiations align with the evolving needs of the organisation, setting the stage for successful and headache-free agreements.
For support with your mobile contract negotiations or to arrange a discovery call visit us at www.utelize.co.uk or email us at firstname.lastname@example.org.