Dealing With Unsuitable Business Phone Tariffs Mid-Contract

Contracts are ingrained within the mobile network industry, tying individuals into long-term commitments with high markup values provides a guaranteed source of revenues to these networks, who are content to sit back and allow their users to pay for packages above their needs. Business lines are no different; many companies sign up for a contract without knowing how much data and voice allowance their employees actually require.

Most businesses will find that their mobile phone contracts aren’t hugely volatile month-to-month, there seems to be a lot of fixed tariff costs (often paying for far too much data and voice allowance than is really required) and always a fair amount of out-of-allowance costs. Many businesses feel that their mobile contract does not really deliver the cash savings that were promised when they took out the contract but struggle to pinpoint exactly where the contract has gone wrong.

While little can be done to address the tariff issue, analysing the out-of-allowance costs in detail, best-done line by line, will at least reveal that the three biggest cost overruns are excess data charges, international direct dials and roaming. Once you had the data at your fingertips you can select the most suitable bundles and tariff upgrade to reduce these out-of-allowance costs.

Unfortunately, businesses have significantly fewer options than consumers have; many providers have started offering flexi-contracts. One provider, Giffgaff (Owned by Telefónica), allows customers to switch data allowances monthly and even send regular reports on usage, recommending higher or lower packages to suit each individual. When it comes to business lines, this isn’t an option just yet. There are however, outside services such as Billmonitor, who offer analysis and monitoring of current contracts in order to help businesses manage their mobile phone costs, whether on renewal or while still in contract.

There are two fundamental ways of managing an employee’s mobile phone costs:

  • Educating employees about their monthly phone bill and highlighting money saving tips, e.g. use of free guest Wi-Fi while travelling, instead of using the local mobile network. Education can be achieved through the employee handbook (dos and don’ts of mobile use) and monthly updates to those employees that have excessive bills.
  • Monthly review of the out-of-allowance costs and requesting tariff and bundle changes as and when required (excess data charges can be avoided by upgrading the tariff, saving c. 90% of these costs, international direct dial costs can be reduced by adding relevant IDD bundles, saving c.80-90% of these costs and roaming costs can be reduced by relevant data and voice bundles, saving c.50-70%)

What Can You Do?

As employees tend to use their mobile phones the way they have always used them, they are unlikely to change their usage pattern just because the employee handbook says so. There is also a grey area when it comes to treating certain employees differently, e.g. what do you do if all employees are allowed to use their mobiles to call home but one employee is from Australia?

A combination of education, primarily focused on confirming the firm’s dos and don’ts of mobile use, and regular bill analysis, which is designed to find the most cost-efficient tariffs and bundles without interfering with the individual employee’s usage, is the most efficient way to reduce your mobile phone bills.

When it comes to the odd exceptionally high bill for the executive on transit in Dubai or an employee watching a cartoon on his mobile phone during a rainy camping trip in the English countryside (the likes we have all read about in the press and far too often seen ourselves) complaining to your network provider is actually a pretty successful approach. Assuming that these events are truly one-offs most network operators will refund such exceptional costs as they are far more interested in keeping you happy or at least happy enough so that you renew once again.

Many businesses know that their contract end date is near when their account manager is calling them – they may not have called for the last 18 months but they surely aim to provide a good service when your renewal date is near. Despite mobile networks’ marketing suggesting they care for you, the truth is, they want your money and once tied into a long-term contract, it doesn’t matter to them how your employees use them. So make a change. Good services can save a business thousands over a 24-month contract. Don’t throw away money, streamline your tariffs and push on.

Klaus Henke

Klaus qualified as a chartered accountant while working for PricewaterhouseCoopers, then spent over 15 years with advisory firms and investment banks including Fox-Pitt, Kelton, Dresdner Kleinwort Wasserstein and D4K Consulting, focussing on traditional M&A advisory and equity capital markets. He read European Finance and Accounting and holds German and UK degrees. Klaus is the company’s MD and looks after Billmonitor’s finances and coordinates business development.