How to Buy Company Mobile fleets
If you do not renew your mobile fleet contract when due – Company funds are being wasted.
Technology and the mobile industry is moving so fast that the bottom-line cost of renewing out of contract is accelerating expeditiously. Imagine a car accelerating away from you as you’re standing still this was a few years ago – then imagine a rocket taking off from your stand still position – this is today and the relative effect of pace of change.
OK so you have put mobile renewal on your must do list (or scheduled it into your calendar at least 3-6 months before the renewal date). How do you prepare? Here are some pointers to help:
Get the numbers together
Mobile industry standard terms are : ARPU (Average Revenue Per User) which is total number of devices or sims / total cost. AUPU (Average Use Per User) which is the total voice and data usage of the devices or sims / total number of devices or sims. Most if not all mobile deals are based on these numbers and should have been used for your current deal to ensure the company benefited from the best commercial offer at the time, otherwise it would have been a ‘finger in the air’ process.
Know your terms
Mobile standard industry terms are:
Co-Terminus (all sims contracts come to an end at the same time regardless of when connected during the contract term)
Jagged Edge (each new sim ordered during the contract term starts its own term for example if you signed a 2 year contract in January 2017 but ordered 5 new sims in January 2018 those sims do not come out of contract until January 2020. However the original sims come out of contract is January 2019 so you now have 2 contract end dates.)
Amortised co-terminus (same as co-terminus but the contract end date extends to allow payback of device costs). For example if your contract was due to expire in January 2019 but you bought 5 new devices costing £500 each in December 2018 this clause would extend the contract until the 5 new handsets repaid the device cost. If each new connection had a £50 monthly contribution to the device cost the contract would extend by 10 months to enable the sims to amortise the cost of devices.
Termination penalty – some mobile providers have termination fees even after the end of the contract term. These can be called device unlock admin charges or similar or something else. Mostly between £20 – £50 per device. You need to be aware of this cost so it doesn’t come as a surprise but your new deal should mean these costs are completely negated due to improved commercials and other benefits. If you have current devices you should definitely ensure they are unlocked to allow you to port them to a new carrier.
OK so now you know what you have, what it costs you, how it operates and any unforeseen costs to take into consideration. You can get to the good bit of procurement – what you need and want.
Most people at this stage say they want to save money but there are more ways to achieve this than just paying the lowest pence per min or £ per GB of data. In a large amount of deals the customer can save money simply by avoiding waste.
A good example of waste is over buying to avoid overage. Lets say the biggest user of data in your company burns through 15GB of data per month. Due to the bundle structure available at the last renewal the best option for this user was 20GB per month. So to make it quick and simple the company signed up to unlimited voice + 20GB of data for every user to make sure there was zero bill shock, easily done because the advice at the time was that data usage will increase substantially and the FD wanted a fixed monthly / annual cost she could budget for. However after reviewing the AUPU you find that most users only consume between 2Gb – 5Gb per month and 1 user consumes 15GB. If you had 50 sims in this position you would be buying 50 x 20GB = 1000GB and using 49 x 5GB +1 x 15GB = 260GB (or less).
Would you willingly buy 740GB of data you didn’t need? On the flip side if your previous renewal didn’t allow flexibility to increase data bundles you may be paying for overage which could be anything between £13 – £50 per GB.
The fact is – if your over or under your bundle allowance you will be wasting usage or wasting money or both. With this in mind you should be looking for flexibility in your new agreement to move and adapt as your mobile use changes with the progress of your business in general. This will ensure you will maintain value for money throughout the contract.
Know what you want
In the past it was standard practice to get shiny new handsets with a mobile contract renewal. You could sign up for multiple years with brand new Nokia 6310i’s and crack on. Then Blackberry arrived, then smartphones.
These days new mobile phones are costing more than laptops and breaking into the £1000+ mark. People are running their lives on their phones and asking if they can use their device for work (BYOD) or have work buy their phone for them.
So why in the world would you pay £600 for a phone and then get it replaced a few months later because its time to renew the company mobile deal?
More and more companies and savvy procurement officers are now de-coupling mobile device and airtime sims. They are separate and can be (should be) bought independently to give you the flexibility to exercise more choice and obtain better commercials on your airtime. Consider a monthly contract for devices and a separate contract for your sims.
With fines now being defined as a % of a company’s turn over and the cost of brand damage combined with the surging use of mobile it’s imperative that you consider security as part of your buying decision. In mobile this is called Mobile Device Management (MDM) and is a software service that locks devices and wipes the content in cases of loss or theft. MDM can also police the usage on a device and allow apps to run that are allowed by the business. These policies can be dictated by the business and enforced by the company IT department or by the telecoms provider if they offer a managed service for MDM like we do at Everything Voice.