Key Trend 1:
Commercial models to manage roaming costs

Roaming costs have always been a source of budget angst for organisations, but recent developments in mobility are exacerbating the problem. 4G and increasing use of mobile data services means users expect to be able to turn on their phone wherever they are and consume services, but when overseas this can be extremely expensive.

Whilst changes such as the new EU regulations make some significant difference, roaming costs in further-flung locations can still be very high, indeed TNC are seeing evidence that this is one area that, left unchallenged, is actually increasing in cost (perhaps in response to the enforced decreases in the EU). To address this, TNC’s research is showing organisations taking three main steps:

  • Data pools

Instead of buying a volume of data per user, the organisation buys a pool which all users share. The idea is that, whilst some users may exceed their allocation, it is unlikely that all users will, meaning that total usage should always be below the threshold, and bill shock is therefore avoided. This approach is pretty effective at addressing the issue of data roaming costs, but there are challenges, including sizing the pool, tracking that it remains big enough with data usage increasing, whilst ensuring it isn’t too big so the organisation is paying for lots of data it isn’t using, driving up the effective cost per MB

  • Flat rate data

As an alternative to data pools, flat rate data does exactly what it sounds like – a fixed price per MB for data anywhere in the world, with the organisation paying for what it uses. In theory this is the most efficient model, assuming the price per MB is competitive…

  • Move away from bolt-ons

Underpinning the above trends is a move away from data bolt-ons. These are increasingly seen as an inefficient and ineffective way of managing data roaming costs because they tend to require a lot of proactive management to add them and remove them as users travel, and also because they have a tendency to be either very expensive per MB if the user doesn’t use a lot of the data, or prone to bill shock if the user uses too much data

Key Trend 2:
Device costs

Most likely, everyone reading this white paper knows that the price of mobility services has decreased significantly over recent years (if you don’t – please call TNC asap and we will tell you all about it!). However, what is less well known is that many organisations are foregoing these benefits because they don’t manage device entitlement and costs effectively.

The driver behind this is the move from BlackBerry and voice-only devices to smartphones, which are often significantly more expensive.

Back in the days of non-smartphone BlackBerry devices, it was typical to see the handset costing around 20% of the Total Cost of Ownership of a user connection over a typical 24 month contract term.

In 2017, with the price of airtime significantly lower, it would not be surprising to see the cost of providing a user with a high-end smartphone (such as an iPhone) being 60% of the TCO of that connection over the same 24 month term.

Clearly, high-end devices will be the right choice in some circumstances, but TNC’s research shows that many organisations are developing and deploying handset entitlement policies to address these costs. Typically these would allow certain categories of users (execs, senior customer-facing people etc.) to have the most expensive handsets, with a much lower cost device allocated to the vast majority of users.

TNC’s research does indeed support this being the most effective way of securing the benefits of lower cost airtime without spending all the savings on new devices.

Key Trend 3:
Estate Size

TNC’s research is showing some very interesting findings in estate size and scale. In essence, this is showing two divergent behaviours:

  • Some organisations are using strict entitlement policies to dramatically reduce the number of connections they provide to their users, thereby considerably reducing the cost of their mobility services
  • Other organisations are deploying more connections as they find new use cases, such as M2M, IoT etc.

The first approach has a very simple underlying logic – the fewer connections you buy, the less you pay. Whilst one can argue that the price per connection may rise a little, the overall logic is hard to fault. TNC’s research also bears out the idea that many organisations have no (or no enforced) entitlement policy, so there is little business logic for how many connections are deployed and which users have them.

On that basis, it is good business practice to develop, deploy and adhere to an entitlement policy. It is also logical that doing so would likely reduce user numbers, which will save money.

However, whilst some organisations stop their mobility strategy journey at that point, other organisations are actively seeking new use cases for mobility and are investing in new infrastructure and connections to support these. Some of the popular use cases TNC is seeing from its research include M2M, providing mobile connections to formerly unconnected users to allow them to use specific applications, and using mobility connections to improve employee engagement.

Interestingly, the main airtime vendors are aggressively pushing these new use cases, because this is where they see the main mobility revenues growth coming from. This makes sense given reductions in roaming costs, massive price compression in airtime pricing, and potentially new entitlement policies decreasing headline numbers of connections. In other words, persuading more organisations to deploy more connections to do new things with mobility may be the vendors’ best way of maintaining and indeed increasing revenues in what are otherwise difficult market conditions.


Other than matters relating to The Network Collective, this research is based on current public information that we consider reliable. Opinions expressed may change without notice and may differ from views set out in other documents created by The Network Collective. The above information is provided for informational purposes only and without any obligation, whether contractual or otherwise. No warranty or representation is made as to the correctness, completeness and accuracy of the information given or the assessments made.

This research does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice.

No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of The Network Collective Limited © 2022

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