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Firms overspending on wireless services

Companies struggle to cope with wireless costs owing to poor contracts and international roaming fees

Firms overspending on wireless services

More than 80% of organisations will overspend on their wireless service costs by the year 2014, according to a report from research firm Gartner.

The report indicates that companies will increasingly struggle to manage snowballing mobile voice and data costs, resulting in a 15% overspend in the next five years.

“Our research shows that the majority of companies are not adequately managing their mobile users or services,” said Phil Redman, research vice president at Gartner. “They need to look more closely at their key user segments and requirements in order to match those needs with the right services and optimise their spending.”

Redman advises that enterprises should break down their expenditure on wireless services into four categories in order to increase efficiency and avoid wasted spending on mobile services. These categories are contractual commitments, international roaming costs, management of mobility and considering the elimination of desktop phones.

The report highlighted international roaming as being particularly expensive and difficult to manage, with some firms facing individual bills “reaching thousands of dollars.” In 2010, some 10% of users that travel internationally will account for 35% of total wireless costs at companies that support travel, according to the report.

Gartner suggests that firms can cut roaming costs by negotiating cost reductions and adopting mobile roaming plans with their carrier, and by making their staff more aware of roaming costs.

However, Redman congratulates midsized to large companies when it comes to contracts saying that more than 60% of them have moved away from buying individual plans, which he says are the least efficient in reducing costs. Newer services, such as pooling plans, flat-rate plans, and zero–minute phones all need to be considered carefully to ensure that they are offering value across an organisation.

Redman also recommends that companies should move away from individual liability plans, where the user is responsible for the payment and contract, to corporate liability plans that allow for better control of costs through the optimisation of wireless services and corporate discounting.

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