Some Common Overcharges

Even though billing engines used by wireless carriers today show a level of improved accuracy over older wireline billing applications, the sheer complexity of telecom billing almost guarantees some billing anomalies.  Add the risk associated with keystroke errors on the high volumes of data transactions handled manually by carrier staff and you’ll find there is some opportunity on practically every invoice to uncover disputable charges.

Manual error checking on invoices with hundreds or even thousands of individual devices is tedious and most certainly will produce a negative ROI with more work effort than savings.  Carrier policies of only crediting invoice discrepancies up to six months back also puts bounds on the potential returns of a scrupulous audit of a given invoice.  In our experience, while the magnitude and frequency of invoice errors is relatively small, there seems to be a higher emotional satisfaction of receiving carrier credits for billing overcharges than finding an equivalent savings through rate plan optimization.

Automated solutions are a much more cost-effective approach to identifying charge discrepancies.  Some Enterprise Mobility Management solutions such as MobilSentry perform a comprehensive set of monthly invoice validation checks to highlight areas where carrier credits are likely.  While there are more credit opportunities than these areas listed below, these highlighted areas comprise the more common and costly errors that might occur on wireless invoices.

Overlooked Contract Changes – When you negotiate a new contract with your carrier it may result in new concessions that generate reduced costs on plans or features.  When these contractual changes occur, there is typically a parallel effort required to update wireless device records so they correctly bill at the new rates.  Often these changes are done via batch updates.  In our experience these don’t always go seamlessly and inevitably leave some number of devices still billing at the older rates.  Do not assume that just because a price change is documented in the contract that it will make its way to every applicable device on your invoice. While these overcharges may be small on a given device, the fact that they might be replicated over a range of devices makes finding these errors a lucrative endeavor.

Waived or Reduced Fees – If you have been successful at negotiating reduced or waived activation or termination fees, our experience is that it is not uncommon for some devices to continue to slip through with the full fee.  The carriers will typically move swiftly to apply the needed credits in these cases but they are not in the business of self-monitoring so it will be up to you to surface any overcharges.

Missed Terminations – Perhaps because terminations require manual actions we find it common that the billing charges don’t always vanish from the bill in a timely fashion. When porting between carriers we sometime find the device continues billing on the previous as well as the new carrier.  A sophisticated EMM solution should have the ability to set the status on a device that has been terminated or ported and monitor subsequent months to confirm it is ultimately credited and vanishes from the bill in the expected timeframe.  A smartphone billing two to three months past the expected termination date can quickly add up to hundreds of dollars.

Overcharges on Equipment Purchases – Manual ordering processes can lead to mis-coded credits or discounts on wireless asset purchases.  Identifying these errors can be complicated by the fact that equipment charges may appear on a subsequent invoice to the date that they were ordered and activated.  These charge discrepancies can be sizable given the much higher average cost per device in the smartphone and tablet era.

Discount Errors – Less common but nonetheless rewarding searches can be focused on ensuring that devices are all being charged at the correct discount levels.  These errors are not frequent but can sometimes be instigated by a changing discount schedule with a new contract.

The examples noted above are some of the most common invoice discrepancies that we find for our clients.  Others include incorrect access rates, double feature billing and incorrectly billed taxes.  How comfortable are you that your wireless invoices are free of billing errors?

The Trade-offs Versus Data Pooling

Data pooling has been offered by some carriers for a number of years but the erratic usage patterns of data cards and the painful overage rates have led to a limited acceptance in the marketplace.  The onslaught of iPhones and Smartphones with more predictable data consumption rates along with smaller overage rate penalties have dramatically shifted the balance. It is no longer a question of whether to pool data devices but whether or not all data devices should be pooled.  With the exception of Sprint who utilizes unlimited data as a differentiator from its larger competitors, unlimited data plans are rarely offered except to the largest clients and government entities.

Not long ago unlimited data plans were common place because the carrier bandwidth exceeded the breadth of applications to consume that bandwidth.  If you are lucky enough to still have an unlimited data plan contractually available then you can benefit from the savings that will come from transitioning data users back and forth between pooled and unlimited as their usage patterns dictate.  However, for most it now becomes a question of leaving behind that grandfathered unlimited plan and moving permanently to data pooling.

So when is it cost-effective to let go of the security of an unlimited plan to benefit from a lower cost pooled data plan?  What cost differential is worth paying the price for the potential downstream need for unlimited data on a given device?  Is any price worth it when you are trading off quantifiable savings today for a potential need in the future?

There are three primary factors in determining whether to permanently relinquish a grandfathered unlimited data card plan.

The Premium Monthly Cost for Unlimited – The largest factor in deciding to retain an unlimited data card plan is the delta you are paying monthly over a comparable pooled plan option.  If the differential in price is relatively small and you have some devices with a history of exceeding 10GB in monthly usage then it makes sense to retain an unlimited plan but only in those limited cases.  If the delta in price is large ($10+) then the sound financial decision will be to opt for the monthly savings and let the spikes be managed via buffers you retain in your data pool.

History of Usage for the Devices in Question – It is difficult to make decisions regarding the appropriate plans without the ability to track historical usage.  Preferably you would have 12 months of history regarding all data card usage.  Sustained usage of 20GB or greater on a data card may indicate that the card is being used for more than business purposes and may require appropriate action to curtail usage rather than pay a premium for an unlimited plan.  More justifiable instances for retaining unlimited plans might come in cases where the data card shows intermittent spikes of usage reflective of periodic travel by an employee.  If these spikes are sizable although irregular then avoiding overage charges in those months may more than cover a modest monthly premium associated with the unlimited plan versus a comparable pool plan option.

Mix of Data Pool Devices and Available Buffer – The larger the device count in a pool, the more easily it will be to absorb random data card spikes underneath a controlled excess buffer.  The greater the percentage in that pool of smartphones versus data cards, the more likely your monthly average usage will be near 2GB/device versus 5GB/device.  If you overall average is approaching the upper plan size of 5GB/device you will experience less flexibility to retain sufficient buffer to absorb data usage spikes over time and the more important it might be to retain some unlimited plans on high usage devices.

Because of the new cost-effectiveness of data pooling and group data sharing, now may be the time to finally move away from legacy unlimited data plans.

Navigating Around the Pain

Traditionally businesses have benefited from reduced device costs on new activations. Built into that price reduction is math that ensures you pay for that price break over the term of your contract.  Cost recovery is usually based on a 2 year term.  If you cancel service on that device prior to the termination of your contract, you get an unpleasant experience of paying an early termination fee.

Most carrier termination fees will start in the $325 – $350 range for iPhones and Smartphones and will range from $175 – $200 for a standard phone. Termination fees typically decline on a straight line basis aimed at expiring shortly before the contract term ends.   Businesses have greater flexibility in finding ways to avoid or minimize the ETFs (Early Termination Fees) because they have more lines to juggle in ways that avoids termination fees.  Below are some techniques that permit organizations to reduce or eliminate ETFs.

Negotiated Waivers – depending upon the volume of business you provide to your carrier or carriers, you may have sufficient leverage to negotiate a specified number of waivers for ETFs in your contract.  These waivers can be used through the course of the year to zero out any ETF fee until you have exceeded the negotiated count.

Using Upgrades Against Zero Use Devices – if your device count is constant or increasing over time you will have the option to convert an unused service line to an upgrade in lieu of activating a new device on another line.  Upgrade eligibility usually precedes contract termination by 2-4 months.

Device Reuse – another way to avoid termination fees is to use unneeded devices to fill new orders.  Cost-conscious companies can be effective at developing the culture that everyone doesn’t always need the newest model.  In particular, when there is a need for a replacement device for a lost or damaged device a cost-effective approach can be one that utilizes unneeded devices that may still be under contract and contain ETFs.

When ETF Is Less Than Monthly Service Cost – for this case, based on a simple calculation, it can be determined if reducing these devices to a minimum plan will be less than paying the ETF. There may come a time when the declining ETF finally reaches a point where it will be less expensive to pay the fee than to pay an accumulating monthly service charge on a device no longer needed.  This option may be necessary for organizations that are seeing an overall decline in the number of wireless devices in use.

There is no reason to pay the carriers unnecessary ETF fees, but it will take some planning to make sure the best of the above strategies can be applied.  Using a solution like MobilSentry acts as your safety net for avoiding ETF fees.