The opening price point will increase by 33% or $5 with 300 MB of data from the old plan of 200 MB for $15. The second tier increases the price from $25 to $30, and it adds 1 GB to the old 2 GB plan. For subscribers who share a data connection or tether their wireless phone with other devices, the new 5 GB plan will increase by $5. The plan details are below:

• AT&T DataPlus 300MB: $20 for 300MB, additional 300MB for $20.
• AT&T DataPro 3GB: $30 for 3GB, additional 1GB for $10/each
• AT&T DataPro 5GB: $50 for 5GB, with mobile hotspot/tethering, additional 1GB for $10/each

iPad 3G users can choose from three plans:

• The existing 250MB for $15 plan
• AT&T DataConnect 3GB: $30 for 3GB
• AT&T DataConnect 5GB: $50 for 5GB

AT&T increased its data allowances because subscribers are using more data than ever. Verizon currently offers 5 GB and 10 GB mobile data plans, for 29.99 and $59.99 for its 5 GB plan. Subscribers that consume more than the 5GB limit face a penalty of $0.25 per MB. At that rate, 1GB of extra use costs $256 with Verizon, and $503.31 for that extra gigabyte of consumption with AT&T. Sprint charges $51.20 for unlimited data plans.

Corporate contracts protect the enterprise from these increases, but there are some important lessons to glean from these changes. First, managers need to recognize that employees are using more data. AT&T and Verizon are now starting to send usage alerts as subscribers consume data within their plan, but employees can ignore these alerts and organizations will want to take proactive steps to manage usage. Even organizations that have unlimited data plans need to begin monitoring and providing reports to employees regarding mobile data consumption. This is an important step to gaining control as employees are not familiar with how their activities effect data consumption. Moving forward, unlimited data plans may no longer be offered as in the case of AT&T and Verizon, or may become more costly.

Second, organizations need to determine if excessive data consumption is a result of devices, mobile apps, normal use for work, or excessive personal activities. Multitasking allows numerous apps to run in the background while actively communicating and downloading data. Managers should consider using a combination of policy and more proactive automated tools to address usage.

Finally, these price increases illustrate carriers’ strategies to use price increases to charge for the biggest consumers of data. Employers should ensure that employees are on the best service plans for their consumption needs and need to be empowered with the proper software tools to effectively manage expenses.

Changing Mobile Handsets

Apple’s launch of the iPhone to Verizon in January and Sprint in August of 2011 helped grow its market share to 29% of U.S. smartphones. Android’s operating system (OS) share of smartphone sales grew to 53%. While Android and Apple saw gains in 2011, Research in Motion’s (RIM) Blackberry market share slipped from 25% in 2010 to 10% through October of 2011.

Malware on Smartphones Reaches New Highs

Since July, Juniper Networks found that Android users have seen a 472% increase in malware. These malicious applications target communications, location, or other personal identifying information. Another popular attack uses SMS Trojans, which operate in the background without the user’s knowledge sending SMS messages to premium rate numbers owned by the attacker. The identities of premium rate numbers are usually anonymous, and the money is not recoverable. With this in mind, employers that have not placed any controls on mobile expenses will experience bill shock from rising costs for mobile service expenses in 2012.

End of Unlimited Data Plans

Last year, carriers saw greater demand from customers’ use of wireless spectrum. However, the explosion in data traffic did not produce corresponding gains in data revenues for operators due to unlimited data plans. In 2011, Verizon acted to address this issue by following AT&T’s strategy of eliminating unlimited data plans for new customers. Most organizations have corporate plans that protect them from immediate increases in mobile data costs, but the carriers will now be seeking to raise prices for heavy users of data services including mobile web surfing, e-mail, and other mobile applications. Organizations will also see rising costs for mobile data charges in 2012, as employees replace their Blackberry devices. This can have a significant impact on data consumption because Android and iPhone smartphone users consume four and a half to nearly four times more data compared to Blackberry users.

Planning for 2012 with Wireless Expense and Mobility Management

Managers need to meet these three trends of growth in employees using Android devices and iPhones, the elimination of unlimited data plans, and smartphone malware with new tools to monitor data usage and mobile spending. TEM reports for wireless services provide dashboard reporting that highlight spikes and variances in charges. TEM programs can also distribute usage reports directly to employees and their managers to help augment security and policies designed to limit malware. In 2012, organizations will need to add new controls to prevent runaway mobile expenses.

2. Stop Making Mobility More Complicated Than It Should Be. Most organizations have a fierce debate going on between employees that want to bring their own mobile devices to work and the managers in IT, security and wireless expense management functions. If employees do not have sensitive data in their e-mails, it may be possible to allow a bring your own device (BYOD) policy for secure mobile operating systems and devices that have secure applications to flag malware. However, after a review, most employers will find that employees do have sensitive data in their e-mails that must be secured and BYOD programs will probably only work for a small group of workers. Acknowledge this challenge, and develop a policy with executive support that avoids making mobility more complicated than it has to be.

3. Stop Creating Custom Reports for Telecom Expenses. Departments, such as finance or procurement may come to you once a year for a special report on telecom expenses. Do they really need the information in this particular format? If you have a good TEM program, it will have several reports that will speak to all audiences of the organization in an automated fashion; saving you from the report you are trying to manufacture. In addition, drag-and-drop functionality will enable you to create multiple custom reports on-the-fly that will have the information much quicker than a custom report from a corporate ERP or financial applications.

4. Stop Overspending on Telecom Services. Many organizations simply procure telecom services from incumbent suppliers. Savings can be substantial when carriers compete for your business. This approach integrates the competitive dynamics of sourcing, in which carriers submit competitive price quotes, with a steady persistent approach to costs savings that TEM programs provide. A good system to manage quotes from carriers will pay for itself through cost savings and automation of the process of requesting new prices, sending reminders, adding new vendors, tracking vendor responses, comparing pricing, converting accepted quotes into work orders, and tracking historical performance.

The NTSB hopes to shape public opinion, but its call for a ban is unlikely to become a nationwide law because the NTSB does not regulate transportation. Therefore, each state will have to pass its own laws. The debate on this ban pits issues of personal freedom against government regulations that would completely prohibit use of cell phones including drivers with hands-free devices.

To further support the danger of using a cell phone while operating a vehicle, studies have shown that talking on a mobile phone is so mentally distracting that it is equivalent to driving under the influence of alcohol. At least when a driver is having a conversation with a passenger, passengers can respond to dangerous driving conditions by toning down their conversation.

Employers should use the call for a ban on use of mobile devices while driving as an opportunity to institute strong corporate wireless policies with clear mechanisms to enforce policy. The issues are open to interpretation, but employers are likely to face legal exposure for employees’ accidents. This liability will include employees with individual liable plan or BYOD (Bring Your Own Device) arrangements.

Companies must start with compliance to local laws, but employers have an advantage over lawmakers. They can quickly implement new policies and flexible responses based on driving conditions for employees. Organizations should remind employees of the dangers when they use mobile devices while operating all vehicles. In congested areas and under dangerous conditions, the policy should clearly state that employees are not permitted to use their devices when they drive.

• Raising prices by and eliminating unlimited data plans
• Adding more customers that pay to use their mobile data network
• Throttle users that consume too much bandwidth
• Offload customers to Wi-Fi networks and hotspots

Enticing More Subscribers to Use the Network with Data Pooling

Verizon CEO Lowell McAdam comments at the UBS Global Media and Communications Conference, confirm that Verizon will offer data plans for multiple devices in 2012. In June, AT&T CEO Ralph de la Vega also confirmed that they are developing a shared data plan. And, Sprint CEO Dan Hesse believes that shared data plans are the next trend in wireless and are looking to add them as well.

Having one bill for each customer is more efficient, and carriers ultimately have relationships with customers rather than devices. However, the main reason carriers are doing this is that they want more revenue from customers that use their mobile data network. Carriers may lose some revenue from customers that consolidate multiple plans, but will need to switch to plans with larger data allotments as they consume more bandwidth, which are more expensive and offset some of the carriers’ losses.

This will lead to increases in spending for wireless services at most organizations. Organizations must develop strategies and implement programs to address changes in mobile data plans. Most organizations do not have accurate information or reporting on employee data consumption due to data plans being unlimited until recent months. Many corporate contracts allow managers to have a false sense of complacency with protection from these changes.

When the contracts end, managers will face changes that require accurate information on employee mobile data usage. Determining if employees are abusing data plans or their devices and applications are data hogs requires accurate inventories of devices, knowledge of employees’ data plans, reporting on data usage and analysis; all things that good TEM program can provide. Wide variances in usage should lead managers to determine if the types of devices and applications that employees are using are causing spikes in usage for some employees. Change is coming for corporations’ mobile data plans. Be prepared.

These findings highlight the critical need for fixed and mobile Telecom Expense Management (TEM) programs to support massive change that is coming to networks and spending. Are you ready for these changes? Data and analytics from TEM reporting can help managers identify cost savings opportunities through consumption reporting. These reports can help identify services with low usage as employees switch from fixed voice calls to use of data and wireless services.

Once you identify opportunities to disconnect services, it will be critical to have systems in place to streamline your requests with carriers. TEM systems can archive disconnect requests and link the information with inventory. A good system will also automate reconciliation of inventory with bills to ensure removal of disconnected items from billing. If the carrier fails to disconnect a service, the TEM software can flag billing errors and provide documentation of disconnect requests to support billing claims. Carriers’ systems do not provide a reliable source for documenting claims.

Managers that seek to cut spending on telecom and network services can learn from Wayne Gretsky, one of the greatest hockey players of all time. He said, “A good hockey player skates to where the puck is. A great hockey player skates to where the puck will be.” In a similar way, for telecom expenses, it is critical to anticipate where the spending will be in the future. Without a good TEM program, expenses will be out of control as you pay expenses for fixed carrier services that employees no longer need, and new expenses grow for new mobile services.

The SEC Division of Corporation Finance stresses that its cybersecurity risks and cyber incidents disclosure obligations are its own views, and not an official regulation from the Securities and Exchange Commission. The Commission calls for timely and comprehensive disclosure of the information if it is important to an investor’s decision about the company. Although existing disclosure requirements do not refer specifically to cybersecurity risks and cyber incidents, a number of disclosure requirements may impose an obligation to disclose such risks and incidents.

The guidance draws attention to the need for organizations to focus on data security. With 43% market share, Google’s Android operating system is an attractive target for cybercriminals. Part of the problem is that the Google Market does not screen developers or applications for malware. According to Juniper, most of these new malicious Android applications target communications, location, or other personal identifying information. Another popular attack are SMS Trojans, which operate in the background and often without the user’s knowledge. The Trojans send SMS messages to premium rate numbers normally owned by the attacker. The identities of premium rate numbers are usually anonymous, and the money is not recoverable.

Organizations should examine their policies regarding mobile devices. The move to Bring Your Own Devices (BYOD) to work and a shift away from corporate liable programs where employers make employees responsible for managing their devices may be premature. While it may not be possible to limit employees to one device, it also does not make sense to allow employees to connect any device to the corporate network with the increase in malicious attacks.

Want to learn more on the topic of corporate mobile policy? Signup for our December 7^th webinar titled Settling the Great Debate: BYOD, Employee Liable and Corporate Liable. You can sign up HERE.

Instead of simply transferring the funds and having the telecom carriers change the line item for the fees that it collects, the FCC has approved a new fee that will start at $0.50 cents a month and go to $2.50 in the future for the Connect America Fund. This seems strange, but the FCC probably thinks that people are used to seeing the Universal Service Fund fee and that they will not notice a new line item for 50 cents on their phone bills. This new program seeks to spread access to broadband, for 18 million American households that the FCC thinks do not have high-speed Internet service.

A few days later on Tuesday, November 1 the House of Representatives passed the Wireless Tax Fairness Act of 2011. The legislation, (H.R. 1002), will place a five year freeze on any new state, local taxes, or other fees imposed on wireless consumers’ monthly bill. It is not clear if the federal government has the authority over 60,000 State and Local tax jurisdictions. The US Senate has not approved similar legislation so there is no timeline for this freeze on taxes for wireless bills.

According to TaxFoundation.org, the average U.S. wireless bill contains 16.26% in taxes and fees. Approximately, 11.21% is from state and local municipalities. Many states including Nebraska, Washington, New York, Florida, and Illinois, have between 20-24% in federal, state, and local taxes.

These taxes are confusing so make sure you have an automated Telecom Expense Management solution in place to validate your bills and flag any tax exemptions.

1. A recent survey found that Telesoft clients’ telecom budgets are polarizing with 37% under pressure to reduce spending and 23% reporting that they are increasing their budget.

These findings are a significant departure from the previous years. First, there are 7% more respondents or 44% growth over 2009 in the number of respondents that report an increase in their budgets. Second, although there was a slight increase in the number of responses from those that report their budgets must be cut, the pressure is also felt by 26% that are under pressure to keep the same spending as the prior year because employees keep demanding more form their communications network including mobile services and video conferencing.

2. Managers are under more pressure from employees that want to select their own devices.

A number of attendees indicated that employees are pushing for more options in selecting devices and executives are asking if it would be easier to let employees simply expense their charges for wireless services. Three firms indicated that they have analyzed this issue and determined that the security risks from corporate data on personal devices outweigh the simplicity of simply providing a stipend for the mobile expense. These firms have found that a well managed corporate liable wireless expense management program is far more cost effective and much simpler to manage than dealing with the security risks from employees bringing their own device (BYOD).

3. Clarifying confusion over IRS tax treatment of employer-provided cell phones and stipends

On September 14, the Internal Revenue Service issued guidance to clarify the tax treatment of employer-provided cell phones. A provision in the Small Business Jobs Act of 2010 (effective after 12/31/2009), eliminated taxes on employer paid cell phones.

The IRS will not require detailed recordkeeping of business use of mobile services for people to receive tax-free treatment. It also announced in a memo to its examiners a similar administrative approach that applies with respect to arrangements for employers that provide cash allowances and reimbursements for work-related use of employee-owned cell phones. Under this approach, employers that require employees, to “use their personal cell phones for business purposes may treat reimbursements of the employees’ expenses for reasonable cell phone coverage as nontaxable.”

Exclusions

The exclusions are not significant. Tax-free treatment of cell phones does NOT apply to reimbursements:

• That are unusual or excessive
• Made as a substitute for a portion of the employee’s regular wages
• Made for morale or good will of an employee
• To attract a prospective employee
• To provide additional compensation.

For most enterprises, BlackBerrys are still the gold standard for mobile communications. Telecom and IT groups place a premium on the cost management tools, security and policy features that RIM provides. They also see value in being able to remotely set policy control and manage data. In addition, the ease of swapping devices, battery life and RIM’s dependability have provided a compelling case for Blackberrys. However, after this week’s outages, employees are demanding change.

The three-day BlackBerry outage interrupted e-mail and Internet services for tens of millions of frustrated users. In addition, the media frenzy surrounding Apple’s new iPhone roll-out has employees questioning why they are using BlackBerrys. Apple says pre-orders of the iPhone 4S, on its first-day, topped 1 million. This broke the record set by last year’s model. For international business travelers an important feature of the new iPhone 4S is that it’s a world phone. Users will now have full access to cellular networks in more than 200 countries around the globe, even when the device works with CDMA.

How should you respond when employees demand an iPhone or other device? While it may not be possible to require everyone to use the same device, you do need to set some limits. Remind them that personal devices can be lost and stolen. Unsecured wireless networks may expose your employee to risks and compromised devices can spread malware to your network. Managers must think about data and information that attackers could target.

Not all employees are able to select the best device for their business needs, and some devices are less manageable than others. It is important to consider the costs associated with changing devices and Blackberry devices’ reputation for more limited data use compared to Androids and iPhones. What are you doing to manage your mobility costs and manage mobile devices within your organization?