Mobile Voice & Data – Is It Still Getting Cheaper?

As any good procurement person knows, the cost of mobile voice and data has been going down for many years, and it has long been a great place to go looking for cost savings.  So surely, after years of prices going down, it must have hit a floor, right?

Wrong.

Mobile voice and data is still getting cheaper, and there are still significant cost savings to be had for most organisations.

How is that possible?  How can something keep getting cheaper?  And what should you do to make sure your organisation gets the maximum possible cost savings?  Read on to find out…

So, let’s look first at how mobile voice and data can keep getting cheaper.  It might sound like voodoo economics, but it isn’t – in fact, it’s pretty logical, and there are three main reasons why:

  1. The unit price of mobile voice and data keeps going down. That might sound obvious when we are talking about mobile getting cheaper, but it is important to note that minutes of calls and megabytes and gigabytes of data are getting cheaper.  However, important as these unit price reductions are, they are only part of the overall cost reduction on mobile voice and data

  2. Most organisations’ mobile tariffs are inefficient, meaning the organisation is spending more than it should for the given amount of calls, messages, and data it is using. A good example here is that organisations will often select a data bundle when they buy their solution, and then not review it over time, meaning that they will often be either paying overage charges, or simply using a lot more data than they expected, for which they could get a better tariff

  3. Most organisations’ mobile estates are unclean, meaning they are paying for more connections than they are using. This can be difficult to avoid because many organisations having very large mobile estates, and they have a lot of people coming and going from the organisation, meaning over time they build up a pool of connections which cost money but are no longer required.  Whilst it is pretty common to find 10% of a mobile estate can be cleansed, it isn’t unusual to find this is 15%, 20% or even higher.  Of course, ceasing connections is the ultimate cost save – it can cut that cost by 100%

TNC’s experience is that the combination of cleaning an estate, migrating to the most efficient possible tariff, *and* getting the most competitive possible pricing creates a really significant cost saving for almost all organisations.

I promised it’s not voodoo economics and it isn’t – it’s smart procurement aligned with smart estate and inventory management.  And it works – TNC continues to deliver cost savings of 30-50% on many mobile estates, and often even higher.  So, if you are approaching the end of your mobile contract, don’t just roll it over – take action!

Of course, the next question is what action should you take?  In practice, there are two options open to you:

Option 1: Competitive Tender
Running a tender process for your mobile voice and data services will maximise your leverage and therefore will maximise your potential cost savings and wider operational and technical benefits.  However, it can take a few months to complete, tie up some resources during that time, and you can’t always tender your estate and keep awarding the contract to your incumbent because the other operators will eventually stop bidding

Option 2: Renegotiation
Renegotiating your existing contract with your incumbent supplier can often be quicker than a full tender and will tie up less resource, but is likely to yield lower cost savings and fewer operational and technical benefits.  Of course, it also means you don’t have to migrate services to a new supplier

In practice, most organisations use both approaches at different times – it is rare to tender your estate at the end of every contract lifecycle, but it is best practice to tender from time to time and not just keep renegotiating.

As a result, TNC would typically say that, if you renewed your contract last time, it’s almost certainly worth tendering it this time, but if you tendered it last time, a targeted renegotiation this time may well yield good results.

Of course, if you are renegotiating, it’s vital you get some market insight from someone like TNC to help you assess the competitiveness of the terms your incumbent is proposing, and to provide confidence to your stakeholders that you really have landed a good deal.

In summary therefore, mobile voice and data has been a great target to deliver cost savings for many years, and it continues to be a great target today.  However, maximising your savings isn’t as simple as just grabbing the best possible unit price – it’s vital that the tariff you select is as efficient as possible for your estate today and in the future, and that you keep your estate clean and accurate to minimise expenditure.  Finally, you need to carefully plan your procurement strategy to land the best deal, and there’s no better way to achieve that than by calling TNC.

 

How can TNC help?

As noted above, getting the very best value from your mobile procurement process isn’t just a question of grabbing the best unit price, or just cleaning up your estate, or just optimising your tariff – you need to do it all.  Of course, that takes time and effort, and requires skilled resources who know how best to do all of these complex things.

The great news is that TNC has exactly these people ready to support you, and the accompanying tools and processes to achieve the best possible results quickly and effectively.

In fact, there is no better way to maximise your cost savings in mobile voice and data than engaging TNC and letting us support you to develop the best-fit strategy, execute the most appropriate procurement strategy, and leverage our insights and market data to ensure you get the best possible results.

If you would like to find out more about how we can help you, we would be delighted to talk to you and share our experience and knowledge

TNC holds over 4.3m active market data points covering WAN, data networks, fixed voice and mobility

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