Save big by combing through company wireless costs

Wireless plans are a great place to start for companies looking to cut communications costs, with one firm reporting at VoiceCon that it saved $33,000 per month by renegotiating unfavorable contracts.

The communications manager from an Ottawa construction firm told a peer discussion group on cost containment and control that the savings came as a result of pointing out how unfair its contracts were based on other more appropriate plans the wireless carriers offered.

The VoiceCon session was set up for attendees to share how they were cutting costs and to ask for advice from others in the same boat. Participants didn't identify themselves to promote candor.

"We were getting royally screwed," the Ottawa manager says. One provider involved was so contrite it gave the firm a one-year service credit, she said. The company never had to threaten to walk away from the contracts. "We didn't push that hard. We would have quit but it was unspoken. They realized we were a good customer that paid our bills."

The firm saved so much money it hired a full-timer to sift through the wireless bills every month looking for errors in its favor, she says.

Another participant says the County of San Bernardino, California, hired a former Verizon billing agent to comb through its Verizon wireline bills. She found $300,000 worth of overcharging. "She's paid her salary for the next five years," a workshop participant from the county said.

The county is following up by hiring a telecom billing consultant to audit its bills for the next two years in hopes of correcting even more overcharges. The auditor is working for a percentage of the errors it finds, so the contract costs the county nothing.

An IRS policy from the days when having a cell phone was a big deal is driving some businesses to push cell phone ownership onto their employees. It saves the companies money but it also reduces the administrative headache of examining phone use every month, telecom managers say.

One Texas energy firm used to issue cell phones to about a third of its 300 employees, but no more. The IRS pointed out it had to consider personal use of the phones by employees as income and had to pay payroll taxes on it, a participant from the company said. Figuring out that each month was such an administrative headache that it changed its policy, she said.

Now, users buy their own phones, set up their own calling plans and the company gives them a monthly stipend–$20 to $100 depending on the worker–toward their bill based on how much they should be using the phones for work. For tax purposes, they estimate that about at third of the phones' use is personal.

Beyond simplifying administration of the phones, the system places responsibility for the phone itself on the end users. If it gets lost or falls in the swimming pool, it's their problem, so support costs are gone. (Employees get to choose whatever phone and carrier they want; most choose iPhones, she said.)

Not so simple to solve was the cost of international roaming. Workers who use their wireless calls outside the United State are hit with enormous bills. One technology solution they talked about was swapping in SIM cards appropriate for the country they are visiting, but most at the discussion group vetoed the idea. The reason? "It's not very user friendly," said Robert Harris, president of Communications Advantage, who facilitated the session.

Harris said some businesses buy telecom expense management platforms to identify places where they can save money. However these seem to be used mostly by larger businesses, the smallest paying $50,000 per month to telecom providers, but most paying $1 million and up, he said.

He said businesses should get an immediate payback from these platforms the first year. Presumably after that spending will be better monitored and controlled, so there will be fewer cost cuts to find.

This story, "Save big by combing through company wireless costs" was originally published by Network World.

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