BLOG: Despite experts predicting a fall in operator roaming revenues from 2017, Eldar Tuvey, CEO of Wandera, thinks it could be bad for business
The European Parliament recently voted to ban data roaming charges from 15 June 2017. The new law will scrap increased costs for calls, text and data while roaming with the EU, and is the culmination of many years of debate (the EU first started to tackle excessive roaming charges in 2007).
On the face of it, the news that the EU are banning excessive roaming charges within Europe is a positive for UK enterprises. Employees’ roaming charges have been a consistent thorn in the side of enterprises based within the EU, and the new law will mean UK employees who travel within Europe will pay the same mobile prices as they would at home.
But is the new law really as positive as we think it is?
Spiralling data costs
Currently, roaming charges are taking their toll on enterprise spend. Wandera recently surveyed 500 companies in the UK with between 100 – 5000 employees to find out the total costs of ownership (TCO) of enterprises mobile devices. When it came to roaming, we found that as much as 18% of the average TCO for enterprise in the UK is made up of roaming top ups, and “bill shock” events where unexpected charges are levied for over-plan use. The average cost of bill shocks for enterprise mobile devices is £182 per device per annum.
Furthermore, in enterprises with more than 5,000 employees, bill shocks are the second greatest single contributor to overall TCO, beaten to the top spot only by the cost of the device itself, and representing an average cost of £282 per device per annum. Small to medium-sized companies in the UK (101-500 employees) incur an average annual cost per device of £128.
The new laws from the EU will of course reduce the likelihood of bill shock and the need for roaming top-ups, and will therefore have a dramatic impact on these costs for UK enterprises with employees travelling within Europe. However, it’s not all good news. While the UK enterprise with employees travelling in Europe will benefit, what about the UK enterprise whose employees don’t currently roam, or indeed those with employees travelling outside the EU?
Traditional operator business models have relied on roaming charges as a major source of revenue generation. It is therefore likely that given network operators’ dependence on roaming charge revenue, the cost of domestic call plans for all enterprises is likely to be raised in order to counter their losses.
This means that UK-centric enterprises that do not typically suffer from roaming charges or international bill shock will actually suffer. Meanwhile companies with employees who travel outside of the EU will be unaffected by the new rules, and will continue to incur high charges.
The EU vote has created a double-edged sword. Those enterprises will now need to work twice as hard to keep enterprise mobility costs down. But there is hope – results from our survey also show that depending on company size, 45 percent to 65 percent of the total cost of ownership of mobile devices within the enterprise is controllable. Enterprises just need to know how to control the cost.
Developing an effective and consistent mobility strategy is increasingly difficult when the decision-making is spread across multiple departments. But costs can be curtailed if companies take a proactive rather than responsive approach to spend on mobile devices. The only way to do this is to gain visibility of true total costs, ensure education of usage limits and pitfalls, and control spend through policies, caps and compression.
The first step is to gain complete insights and visibility into the true financial costs companies face from enterprise mobility. Visibility requires real-time analytics and granular insight into data at both the admin and end-user level, so that activity on the device and in the data stream can be understood. Without correct real-time information, companies are effectively flying blind.
These tools can provide the fundamental information for making informed decisions across multiple departments in the organization. The vast majority of the steps to take in cost control are about behaviour, which means finding out the specific areas driving up costs and usage, then educating your employees and users on best practice.
Based on our experience, data cost management is a process whereby many different levers can be used to effectively manage mobile data costs. These include policies for domestic usage and roaming; bill shock prevention through usage caps and thresholds; and data compression to reduce the overall load.
Data usage levels are growing exponentially due to increased tethering, music downloads, and over the top services such as Netflix. As a result domestic plans are increasingly being overused, incurring expensive carrier charges.
Data compression technology can minimise data requirements at the point of carrier contract procurement, and mitigate against the carrier extras danger. Prudent usage policies including capping and blocking can ensure that access to unrequired (and from a security perspective, imprudent) content is restricted – even to the extent of removing as much as 30% of overall data used.
It is hoped that the EU roaming charge ban will dramatically reduce the cost of continued mobile connectivity while abroad for some enterprises. However those companies who do not incur roaming charges, or who continue to roam outside the EU must avoid becoming adversely affected by rising domestic call plans. The only way to avoid this is ensure complete control and visibility into mobile spend.
Eldar Tuvey is CEO of Wandera
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