If you are looking at a new mobile contract?

If you are looking at a new mobile contract?

Every year or so, mobile contracts expire and we are faced with a new shiny proposal on our desk. It looks good. The savings look good but is it minimising  what you should be spending?

Some years ago, everything mobile was regarded as expensive – the mobiles themselves, the rentals and usage rates.

Each user would be on a plan with a fixed number of voice minutes, TXT and data MB (not GB yet as usage was not that high!). Management was an ongoing problem and it would be rare for a business not to receive an occasional ”bill shock” where usage suddenly spiked beyond plan limits. Changing plans to match individual’s usage was ongoing.

Today – it is a very different story. Bundled mobile plans of some sort are pretty much the norm. While the detail between service providers obviously differs, a typical plan now would be a bundled one with a pool of voice minutes, TXTs and data GB for all to share. Most including unlimited TXTs with a number now including unlimited national or even trans-Tasman voice.

There are some considerable advantages to a bundled plan. The key ones are:

  • Billing amount certainty – excluding a few call types e.g. audioconferencing and international roaming – the monthly bill should be the same every month
  • Over usage by one person is balanced by the under usage of another person
  • No longer any need to manage individual plans

But there are also a few issues to be aware of:

  • Is it the right plan? The attraction of a pool with very high (or unlimited) pool can be very attractive. Savings based on a previous plan can be obvious and desirable but are they as much as they should be. But with a bit of analysis you may well find:
    • The pool usage amounts offered could be well above that needed – by reducing the pool you can reduce the $/month rental
    • Do all your connections need to be on a high $ plan? – No doubt there are many data only devices such as laptops that while still in the pool could go on a data only plan instead at up to say $50/month saving
    • Are there mobiles that are not used now that should simply be relinquished
  • Depending on the service provider, it may be difficult to tell when one of your staff is heading toward or has hit really high usage. It may or not be possible to receive individual pre-set usage alerts because individual usage is hidden within the pool. Make sure some are not “stray connections” outside the pool – they can cause bill shock in a hurry
  • Depending on the service provider, monthly reporting on group or individual usage may not always be easy. Not necessarily impossible but you may have to interact with your telco a bit more than you thought

You may also experience the situation where the service provider offers better rates but for various reasons they do not seem much better than you see on the Internet. In this case they may offer quite attractive amounts called something like a “technology fund” or “development fund”. These funds are intended to go towards devices or application development to make your business work smarter. This is a great idea as long as you actually intend to use these funds. If not, check to see if these funds can be put towards a use you know you have.

The structure of mobile contracts is changing all the time and one consistent theme is that you will get more for the same money (if not less). In most situations the service provider will try and give you more for similar or slightly less cost. Above are some of the challenges of working out what you are being offered and is it value for money. Just because it is less than your last contract does not mean it is good value. Look at the detail and ask your self are you going to use what you are being offered. If not, there may be a better deal to be had.

If you have a new mobile contract on your desk for signing take the opportunity to let us review

1 Comment

  1. Some great tips there. I wonder how long it will be until plans that lock the customer in are discarded?

    Reply

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