Member Article

Six ways mobile operators still sting businesses

Whilst it was good news that roaming charges in Europe fell dramatically but according to Dave Millett of independent telecoms brokerage Equinox there is no need to feel sorry for the mobile industry as there are plenty of little tricks that ensure it remains highly profitable at your expense:

1. Roaming Away From Europe Many countries outside Europe have no data or cost cap, and prices have gone up to counter the reduction in Europe. Most smartphones are data hungry so download an app that will compress your data thus reducing the cost. Consider buying local pay as you go sims - providing your phone is unlocked. Plus always look for free wifi. For heavy users a business grade VOIP app or other free apps that act as automated calling cards will significantly reduce call costs.

2. Locking Phones Many networks will lock phones to themselves. The cost and time of unlocking should be factored into purchase decisions. Doing it officially via the networks can take up to four weeks and can be, proportionately, very expensive if you are a low user.

3. Inflating Handset Funds A favourite trick is for the provider to start inflating the hardware fund they will give you. In many cases it is a false figure. We regularly see handset prices inflated by 25% at least. Therefore the buying power of the handset fund is much less than you think. Always ask if you can have the hardware fund as cash so that you can buy your own phones sim free. Finally very few providers will tell you at the end of the contract if there is any hardware fund left and even fewer will give it back to you. Make sure you agree this prior to signing the contract. It is very profitable for providers to keep all the unused hardware funds

4. No such thing as a Free Phone The phone is not free - you are actually paying for it in every monthly payment. What the mobile companies find very useful is that when the contract is up the same payment continues after the phone has been paid for. A recent report http://www.telegraph.co.uk/technology/mobile-phones/10827082/Britons-waste-1bn-paying-for-phones-they-already-own.html estimated that in the UK alone £1 billion was being wasted on payments for phones that had already been “bought”. That is a lot of money for the mobile operators to share.

5. Keeping You Perpetually in a Contract The operators have multiple ways of keeping you in a contract or denying your organisation the opportunity to review, in full, your options.

The first is the mid-term renewal. Suppliers often go back to customers half way through their 24 month contract and get them to sign for another 24 months. In return the customer is given a hardware fund or handset upgrades. But this means you never gets to a contract end when you can genuinely compare your tariff to the marketplace.

The second trick is; when adding new handsets, each handset starts their own two year contract so that the organisation never reaches a situation where all the phones are out of contract.

The way round it is to ensure you get a Co-terminus Contract from the outset so that all the phones share a common contract end date whenever they are added. The other option is to go sim only.

It can even help you avoid a contract altogether as there are now business focussed one month rolling contracts. These can give a lot of flexibility - particularly to growing or changing organisations.

6. Are Unlimited Deals the Best Value The industry heavily promotes the unlimited calls and texts model of packages. Sounds attractive but in reality you are almost always going to be paying ‘over-the-odds’.

This is because the pricing of the bundle is set at a level that about 80% of people/organisations will never reach. Businesses often overestimate the volume of calls they actually make, therefore buying a service with usage corresponding to their actual usage can often save money.

By watching out for some of these tricks, and taking steps to mitigate their impact, you can ensure the money stays on your pocket, and not in that of the telecoms provider.

This was posted in Bdaily's Members' News section by Dave Millett .