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Loading...By Gary Young, Equinox
It’s essential to manage costs and business owners are generally reviewing their key costs on a regular basis. However, telecoms often does not get reviewed for years at a time This may be because people don’t think they can save much so they don’t bother to investigate the options. However, the evidence suggests that there are substantial savings to be made.
Image: Pixabay
Let’s look at what is impacting prices in the telecoms market and then look at what you can do to reduce the telecoms costs for your business.
The Telecoms Market
Mobile Data costs
Consumer and business mobile data tariffs have plummeted over the last few years. In 2015, the cost of 1GB of data1 was about £10. Today you can get business deals for data at less than £1 per GB and, even, unlimited data for £30 per month.
Operator revenues have dropped
Operator reported revenues2 between 2012 and 2017 dropped by 8% but the number of fixed phone lines stayed the same and the number of fixed internet connections increased by 19%. By definition that means unit costs are falling.
Consumer Telecoms spend
Between 2017 and 2018, the average consumer household spent 8.5% less3 on their telecoms. If anything, the consumption of telecoms is going up (more data, more calls etc.) so this strongly suggests that it is costs that are dropping. And this applies to businesses too.
Unmonitored costs
We have any number of case studies where we have saved somewhere between 30% and 80% for companies and schools.
Recently Onecom released data showing that SMEs, on average, are spending £2,052 per year on telecoms. Would 30-80% of that amount be worth getting back into your bank account?
How to Reduce the Costs of Your Telecoms, Broadband and Mobile
Don’t let your contract default to standard terms
Many telecoms contracts are for an initial term, perhaps two years. After that, the terms, and prices, can often change for the worse. Make sure that you review your options before the contract’s initial term finishes. Make sure that your review takes place in sufficient time that, if necessary, you can give notice to your current telecom supplier. Many companies try to add long notice periods so that you are tied into them for the long term.
The Right Number of Lines?
If you have an ISDN-based phone system, how many lines are you paying for? If your business has changed significantly you may be paying for lines you no longer use. If you are still in contract, you may not be able to change that number, but if you are past your minimum term, you will be able to.
Switch to VoIP
Openreach aims to stop all ISDN-based services by 2025, so you will have to switch relatively soon, but the benefits of VoIP mean you are highly likely to be able to save money by switching sooner rather than later:
- Lower call costs
- Ability to change line count, up and down, as needed
- Making maximum use of your internet connection will also deliver economies of scale.
Your Call Patterns
Do you make lots of long calls or a large number of short calls? Fixed line call tariffs are, generally, either cost per call- or cost per time-based. If you make lots of calls and pay per call, you are almost certainly paying much more than you should and would be better off using a cost per second tariff.
Time to pay for calls, texts and data only?
Once you reach the minimum term on your mobile contract, you have paid off the hardware part of the monthly cost. If you don’t yet need to upgrade the hardware, you should talk to your mobile operator about only paying for the calls, texts and data.
Find Cheaper Phones
The mobile operators are not always the best people to get your phones from, particularly if you are buying in bulk. Better deals can, almost always, be found elsewhere. Even if you don’t want to add this to your Capex (capital expenditure) spend, you can always ask the mobile operator for the hardware fund. You can then spend that elsewhere, and pay it back to the operator on a monthly basis.
Are Unlimited Calls Needed?
Many businesses take out unlimited call contracts for business mobiles just in case people make huge numbers of calls. You may not be making the savings you expect by doing this. It’s like an All You Can Eat at your local Chinese or Indian restaurant; they rely on the fact that you will eat far less than you expect. It’s the same for the mobile operators.
Don’t Bundle Copper
Depending on what internet connectivity is available, many companies end up with very strange connections. Bundles of copper-based ADSL lines will deliver (eventually) the bandwidth your business needs but will rarely have the support you need and the contention ratios you want. Avoid these sorts of ‘make up’ bundles as a way of creating what you need.
Take to the Air
If you are in an area with poor internet connections, look at alternatives that are air-based. Line of site, satellite and 4/5G are all options to consider. Some may be short terms options until a bigger line is installed. Others may only really be suitable for smaller businesses – but don’t automatically take the Openreach controlled option. There are alternatives, and they are often just as suitable, if not more so, and cheaper.
Don’t think about your telecom costs in isolation. Also think about the impact of your choices on productivity. Say you decided to reduce costs by switching to a slower internet connection. You may discover that this negatively affects your staff’s productivity. As a result, your employees will be unhappy and frustrated, and your costs could end up being higher overall.
If like many businesses, you haven’t looked at your telecom costs for five years (or more), you could find there are substantial savings to be made. Get in touch with an expert who’s aware of the current deals and you can reap the benefits of lower telecoms costs.
Gary Young is Director of independent telecoms brokerage Equinox. Gary works with companies, charities, and other organizations to help them choose the right telecoms packages for their needs and thereby reduce their costs. He is particularly knowledgeable on the integration of IT and telecoms in business.
The views and opinions expressed in this blog are those of the authors and do not necessarily reflect the official policy or position of any other agency, organization, employer or company.
Citations
1. How much does it cost for 1gb of data
2. Ofcom Communications Market Report
3 Average UK Spend on Home Telecoms Services Falls as Data Use Rises
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