Drew Kelton, EVP, T-Mobile Business Markets
Think back to 1994. Forrest Gump. Michael Jordan playing baseball. AOL and dial-up modems. Bill and Hillary in the White House. The letter ‘i’ was still thirteen years from its ascent as a prefix for one-in-four technology words (my own estimate) and only nine percent of the U.S. population had a cell phone. It was the desktop computer era.
Now fast forward twenty years. Oh how times have changed. Not only do the vast majority of people own a cell phone but they’re now an absolutely critical tool for businesses. More tablets units were shipped last quarter than PCs. This is undoubtedly the mobility era.
Through that incredible growth, the U.S. wireless industry has largely been able to set its own terms. It created the perception that international communication was incredibly expensive and it setup a highly lucrative subsidized device system in which businesses entered into a Faustian bargain with wireless carriers. The carriers would provide businesses with the latest shiny new toy, but in exchange, the carriers would not only recoup the device cost over the period of a multi-year service contract, but would continue to pay hefty service fees even after the device had been paid off.
Not only did wireless providers successfully lock customers in with restrictive, over-priced service contracts, businesses also built mobility support functions— procurement, help desk, finance—around this same subsidized device model. That has only given wireless providers additional incentive to maintain the status quo.
The wireless industry took advantage of the opportunity it was given. But those days can and should be over. Let me explain.
The fear of the unknown and fear of change are powerful incentives. The two predatory giants in the wireless industry, which combined control of nearly seventy percent of the market, have relied on those two “fears” to maintain their dominance. Five years ago, when those two companies controlled the device supply and network spectrum, that logic made perfect sense. That’s no longer the case.
"Flexibility and simplicity in respect to rate plans is essential as the number and types of devices increase as payment models evolve"
Times change but sometimes perceptions aren’t as quick to catch up. The playing field has leveled considerably in the past several years. Every carrier stocks largely the same iOS, Android and Windows devices. With LTE, HD Voice and Wi-Fi (including Wi-Fi calling), highspeed networks complete with amazing sounding voice quality are ubiquitous.
The time is right to re-evaluate mobility andhere’s where the industry is moving and what you, as a leader in your business, can do to ensure you’re ahead of the game.
1. Pay Only for What you Use—shared voice and data pools had their day but that day is over. I don’t even think there’s such a thing as a non-unlimited voice or text plan anymore so we’re really just talking data. Every MB of data that you pay for but don’t use is throwing money out the window. Demand unlimited plans without overages.
2. Total Cost of Ownership Applies to Mobility, too!—I’m amazed at how many organizations don’t include costs like international travel, handset insurance or security into the total cost of ownership. These aren’t rounding errors and are becoming incredibly important as the world shrinks, devices become increasingly expensive and malware and digital theft become more prevalent.
3. 3. BYOD is here to Stay. Embrace it— one size doesn’t fit all these days, does it! Your wireless provider should provide the flexibility you need for the employee support model that makes the most sense for your business. Employee brings their mobile device, you pay the bill? Check. You supply the device, employee pays for the rate plan? Check. Flexibility and simplicity in respect to rate plans is essential as the number and types of devices increase and as payment models evolve.
4. Subsidized Devices give the Carrier all the Power—I hear this all of the time, that businesses like the security of a contract because they believe it gives them the power to negotiate. Here’s the thing, you can have a contract without having the carrier subsidize your devices. While it will force some changes in budgeting—opex vs capex—paying for the full price of the device paradoxically saves you money. Force your carrier to be transparent and show you what exactly you’re paying for.
5. People Resources are Valuable, Use them Wisely—Many of the organizations I see on a daily basis have an army of accountants, lawyers and procurement people that spend their time managing contracts and data plans and international travel and all sorts of things. If you don’t have subsidized devices and all of your data plans are unlimited and international travel plans are free and included with your plan, why do you need all of those resources? Re-invest those headcount into growing your business, not for more back-office bureaucracy.