The announcements reveal that both providers have overcome issues related to billing and device subsidies. Shared buckets for a data allowance means there will be less revenue per device, but this shortfall can be made up in part through increased data consumption from tablets. Currently, 90% of the tablets that were sold last year relied solely on Wi-Fi connectivity instead of carrier services.

Neither firm has offered specific details on timing of when these plans will be available, but these two announcements bring us closer to data pooling for enterprises. Determining if you will benefit from the adoption of data pooling will depend on how much data your employees consume. As the number of devices that your employees use on carriers’ wireless networks grows, there will be a greater chance for bill shock down the road. And, since we’ve already where devices that use the new fourth generation networks can quickly consume enormous bandwidth, it’s best to get out in front of managing data use before it becomes a problem.

Employers that pay for mobile devices will face an important decision. Can they save money by switching to data pooling? For those that have unlimited data plans or other arrangements, the answer will require some calculations.

Managers will need an accurate inventory of employees’ mobile devices and future deployment plans for new devices that will rely on carrier mobile broadband capabilities. It is critical for organizations to track employees’ mobile data consumption before switching from an unlimited data plan for smartphones to a pooled bucket of mobile data services. Inevitably, some employees will be big consumers of mobile data and should maintain an unlimited data plan as long as it is available to your organization.

Pooling of mobile data will provide organizations with an opportunity to reduce their mobile expenses, but it will require more accurate inventory tracking, reporting of data usage and analysis of consumption patterns through the use of a mobile expense management solution.

News reports on this issue focused on the small $25,000 penalty and legal matters. The real issue that telecom managers should focus on is how easy it was for a Google engineer to collect data to map the location of wireless access points and payload data from unencrypted Wi-Fi networks. According to the FCC report, this payload data included e-mail, and text messages sent to and from wireless access points. The project gathered over 200 gigabytes of payload data and 200 billion bytes of information.

Important lessons from this investigation and the public response apply to your mobile policy and assumptions that are used in justifying BYOD programs. First, the general public (your employees) do not realize how exposed their communications are when they use unencrypted Wi-Fi. Second, the security problem is made worse by carriers’ moves to eliminate unlimited data plans and/or throttle users that consume too much mobile data. Third, many employees are now consuming more data on their mobile devices due to applications and other uses of smartphones.

If your company has adopted a BYOD policy, and employees pay for their mobile services, don’t be surprised if they are using free unencrypted public Wi-Fi hot spots to reduce their expenses. The FCC investigation into Google Street View shows how easy it is for hackers to intercept your employees’ communications. In addition, a recent Symantec report shows that hackers are no longer just targeting executives. “Fifty-eight percent of people who are being targeted are in positions such as public relations, human resources and sales — positions that can provide cyber-criminals with corporate information and open the door to more attacks,” said Kevin Haley, the director of product management at Symantec Security Response.

The lessons are clear. Educate your employees about the danger of using unsecure Wi-Fi networks and don’t assume that employees are knowledgeable about security risks. Reconsider BYOD and Individual liable policies in which employees pay for their services. These policies may reduce some expenses in the short run, but they may lead to more costly security breaches when employees use free unsecure Wi-Fi networks at Starbucks, McDonalds, hotels or some other public location. Finally, consider a wireless expense management program to proactively manage costs and catch usage anomalies through reporting.

You may have a corporate policy and the tablet roll-out may have begun several months ago, but here are two new questions to consider.

What is the right balance for work and leisure activities?

• The media capabilities tablets are much richer than laptops and smartphones.
• There are opportunities to access applications for social networks, free games, video streams, and much more. Employees will be tempted to mix work and leisure activities, even if it is a work device.

How will we address privacy issues?

• Employers that use Mobile Device Management (MDM) solutions must consider how they will deal with information about deployed devices.
• Location information presents a dilemma because employers can learn where employees are at any time and what they are doing on their devices.

If you have a mobile policy, the team that developed it should meet to consider these issues. Ideally, a mobile policy board composed or a cross section of employees, human resources and legal personnel should meet to address these issues. Many organizations have a particular corporate culture and this may guide discussions. Finding the right balance for which websites and apps that employees can use is not easy. And, the privacy issue presents challenges because managers may have access to this information.

At a minimum, these issues should raise questions about your mobile policy and provide an opportunity to update it. The policy review should include consideration for how you will enforce it with reporting and a portal to assign devices and service plans. A portal can also help to manage mobile assets and educate employees of policy updates, new risks and tips to avoid wasteful consumption of mobile data services.

Sprint public affairs manager John Taylor states, “We have collected and paid over to New York every penny of sales taxes on mobile wireless services that we believe our customers owe under New York state law.” The case centers on what portion of a flat-rate calling plan can be taxed by the state where the subscriber lives. Sprint is asserting that New York can tax only calls that start and end in the state.

Courts will determine the outcome, but taxes for wireless services are high compared to other items. KSE Partners’ five year study of federal, state, local taxes and fees on mobile services found they average more than 16 percent compared to 7.4 percent for other taxable goods. The report, “A Growing Burden: Taxes and Fees on Wireless Service,” shows that New York has 11 different categories of taxes.

Wireless taxes and fees include five parts: federal tax, state sales tax, state fees, local 911 fees and local “utilities” charges. State and local fees vary depending on the level of authority states give local governments to impose wireless taxes. Subscribers often are double-taxed with a gross-receipts or excise tax is levied on top of the general sales tax.

The Sprint case shows a rare situation where the carrier used a narrow interpretation of the tax code to minimize the charges that it collected from its customers. Generally, telecom carriers will favor government tax authorities when they calculate the tax rates and charges. Carriers have a strong incentive to ensure they collect enough funds or even charge a bit extra for taxes because it is nearly impossible for them to collect higher taxes later from customers. They also benefit from float between when they collect taxes and when the funds are paid to the government. And, taxes on bills are rarely challenged by customers. After all, carriers can claim to simply serve as an intermediary collecting the taxes that government sets.

Taxes collected by carriers on behalf of government are very complex and subject to interpretation. Carriers can and do make mistakes collecting taxes from organizations that have exemptions, assigning the wrong tax rate and making errors in the calculations of what taxes are due. Have you ever wondered about tax charges on a bill or attempted to verify the accuracy of charges on your bills? You should!

On April 22, Verizon will join AT&T and Sprint which doubled their upgrade fee from $18 to $36 in February 2012 and September 2011, respectively. In the United States, wireless telecom carriers use subsidies to encourage customers to upgrade their devices from cell phones to smartphones that use mobile data, thereby generating more revenue for the carrier.

However, this strategy has worked better than expected. Today, the average smartphone has an average replacement cycle of 11.5 months! Verizon is hoping that the $30 upgrade fee will persuade people to replace their devices less often, thus reducing the costs of subsidizing new devices. Popular devices, such as the iPhone 4S that is offered at $199 with a two-year service agreement, costs Verizon $450 to subsidize the device.

Carriers have also been incurring added costs for moving to faster new networks and having to expand their network capacity to support an increased user base. This has been offset for all four major U.S. wireless carriers in their average monthly revenue per customer (ARPU). The increases in ARPU are coming from mobile data services on smartphones, hotspots, tablets and notebook aircards. Carriers are attempting to alleviate some of the burden by coming up with new fees and surcharges, such as an upgrade fee.

Keeping Mobile Expenses to a Minimum

Tracking the date a mobile user acquires a mobile device and their eligibility for a new subsidized carrier device is crucial. Align your timeframes for replacing devices in your mobile policy with provisions in carrier contracts for subsidized devices. Also, be prepared to change your mobile policy to adapt to carrier surcharges or price increases for devices. Identifying how much data employees consume and match data usage to the best plan for each user is critical for keeping mobile expenses at a minimum.

With your policies set, Wireless Expense Management reporting and other tools will help you monitor and enforce them.

1: Poor preparation. Many organizations do not prepare effectively before beginning a TEM evaluation. This often leads to confusion as they become engaged with a provider because they do not fully understand their current processes and how to evolve them to maximize benefits and efficiencies. Organizations should audit how they manage telecom services including all processes and policies for expense management before evaluating and selecting a TEM provider.

2: Not having the right people on the team. The evaluation team should include all stakeholders that manage telecom services and expenses. Most organizations find this includes sourcing, procurement, accounts payable, invoice processing, finance, IT and human resources.

3: Not properly vetting TEM solutions providers. If the hand-off between sales and implementation is poor, the customer has to go back to explaining their business requirements. Enterprises should ask to speak to the implementation and account teams before finalizing their selection. Ask references about the specific features, functionality and any challenges they faced with the program. How challenges are resolved between the organization and the provider is critical to the success of a program.

4: Not understanding or using key features. Organizations miss opportunities to automate business processes, complete functions faster and meet business objectives when they fail to understand all the key features of a TEM program. Ask if the solutions provider offers “hands-on training” and customer conferences. Even when organizations outsource their TEM program, they will find benefits from user groups and training.

5: Underestimating the importance of accurate data. Your TEM system is only as good as the data in it. Before starting the implementation you must gather all contracts, carrier contacts, letters of authorization, procurement procedures, an inventory of billing records and services, expense allocation codes and payment procedures. The TEM solution provider may be able to collect all this data for you, but not without your assistance.

Implementing a TEM program involves business units with disparate processes. Good planning will help avoid delays and unexpected expenses. A successful TEM program can streamline labor intensive processes and cut telecom costs but only after a successful implementation.

Why High Gas Prices Lead to Increases in Spending on Telecom Services

Communication and customer outreach is critical for all companies, government entities and charitable organizations. It is especially critical for new business, fresh ideas and growth. Rising gas prices make the cost of face-to-face contact more expensive. As the cost of travel rises, employees will find new ways to connect with customers and peers including video conferencing and screen sharing software.

Increasingly, employees that have long commutes are working from home several days each month to avoid commuting costs. This leads to firms finding innovative ways to use mobile services and other communications technologies to reduce their energy expenses.

Adapting to This New Environment

On February 29, CIO Magazine published an article titled Get Out More that encourages CIOs to get out of the office for more meetings. Until fuel prices begin to drop, this advice seems out of step with high travel costs. In the meantime, organizations should be encouraging employees to substitute video and other forms of communication to replace travel. High gas prices affect everyone, but subtle changes in behavior can lead to communication methods that are less costly than travel.

Telecom services can improve operational efficiency, reduce operational costs and improve reliability. Problems like the recent rise in gas prices create opportunities for telecommunications to make a difference. At the same time, increased consumption of telecom services leads to opportunities for Telecom Expense Management programs to track and optimize spending.

Verizon estimates that streaming video over an LTE connection will use double the data compared to accessing video over a 3G link. In addition, sharper screen resolution and new processing power will lead many users to shift to high resolution videos, transmit e-mails with larger data files and rely on files stored in the cloud. And, the iPad is not the only device that utilizes this technology. Even if your organization does not support the new iPad with a 4G network, it is the beginning of a new trend that you will need to address.

As carriers such as AT&T and Verizon have been facing a decline in voice revenues, they’ve decided end unlimited mobile data plans to create replacement revenue streams. In addition, carriers are working to convert customers to the faster network because it requires less capacity to deliver data and relieves pressures on older 2G and 3G networks. Until the introduction of the new iPad, only 5% of Verizon’s customers were using the faster data network.

The new iPad provides a compelling reason for people to switch to the speedier network. And, over the next year as carriers continue to expand their 4G coverage; there will be fewer devices that rely on the old network. Subscribers will automatically be upgraded to the new network as they procure new devices. For managers, the challenge is clear: Unless you have a legacy enterprise unlimited data plan, costs will escalate.

During this transition period, managers need to educate employees to about the cost of data. Managers that fail to provide employees with usage chargeback reporting will face bill shock from data usage on these new networks. A mobile TEM program can provide reporting and help you establish new policies with communications to control mobile expenses for the new iPad and your next generation of mobile devices.

1. Align Your Objectives

TEM programs involve many different functional groups: sourcing, procurement, IT, accounts payable, finance, facilities management and finance. Each group may have a different goal.

• Sourcing wants better information to negotiate future contracts
• Procurement could be looking for an accurate inventory of services and a better way to manage competitive quotes before placing orders for new services
• IT could be looking for seamless interfaces with existing systems and enhanced chargeback reporting
• Accounts payable wants a more efficient system to process invoices and avoid late payment penalties
• Facilities Management may seek to streamline service order for new sites
• Finance may be looking for better reporting

All teams may want cost savings, but it may not be the top priority for each. It is critical for internal groups to discuss their different objectives and there should be clear priorities and communication with the TEM solution provider. Breakdowns develop if the internal groups never align their objectives or they fail to establish priorities. Try and keep the number of priorities to a minimum in order to achieve the most success.

2. Define How You Will Measure ROI

Finding costs savings with a TEM program is rarely a problem, but quantifying the savings and agreeing how to measure them can be difficult. TEM programs provide savings from automating manual labor intensive processes, savings from cost avoidance, hard dollar savings from refunds of carrier billing errors, credits, and benefits from improved information. Many organizations have strict rules for how they recognize savings from cost avoidance. For some, hard dollar cost savings for refunds are the only savings that are measured.

3. Prepare for Implementation

One of the most important steps to capture savings once you have selected a TEM provider is to be prepared for implementation. This includes carrier contacts, letters of authorization, copies of contracts, an inventory of billing records and services, allocation requirements, the accounting structure of entities with the cost center chargeback, general ledger codes and check feed requirements. If this information is not readily available, it will be necessary to dedicate some resources to collect it or hire the TEM provider to do this.

TEM programs can be a big success. Plan and define how you will measure performance so you can calculate ROI savings. Telesoft has an ROI calculator to get started.

While the new iPad offers blazing fast 4G LTE connectivity and a super sharp screen resolution, it comes at a price. The new device will consume data faster than ever before. As organizations deploy them for video chats and online meetings with employees that work out in the field, the impact on mobile expenses will be significant. While that will enhance business productivity, it will come at a cost, especially if users exceed monthly data allowances.

The figures below for AT&T and Verizon show how there will be increases in data usage for the average user that accesses 10 applications, 5 hours of You Tube and 10 hours of a NetFlix movie. AT&T estimates data usage for its 3G and 4G speeds will remain constant. With AT&T, the increase in data consumption will arise from higher resolution applications, but the increase only equates to1%. This contrasts sharply with Verizon’s 41% increase. Verizon subscribers will see a doubling in data usage for new high resolution applications, and significant increases from accessing You Tube and NetFlix.

AT&T

Monthly data usage estimates with AT&T’s 3G connection for an iPad 2

• 4MB(10 apps) + 120MB(5 hrs YouTube) + 306MB(10 hrs NetFlix) = 3700MB/month or 3.61GB

Monthly data usage estimates with AT&T’s 4G connection for the new iPad

• 8MB(10 apps) + 120MB(5 hrs YouTube) + 306MB(10 hrs NetFlix) = 3740MB/month or 3.65GB

Verizon

Monthly data usage with Verizon’s 3G connection for an iPad 2

• 7MB(10 apps) + 250MB(5 hrs YouTube) + 250MB(10 hrs NetFlix) = 3820MB or 3.73GB

Monthly data usage with Verizon’s 4G connection for the new iPad

• 14MB(10 apps) + 350MB(5 hrs YouTube) + 350MB(10 hrs NetFlix) = 5390MB or 5.26GB

New iPad Data Consumption Expenses

The above data usage statistics might not fit into the normal corporate user, but it provides insight on how the new iPad will increase data consumption. Further, the above estimates don’t take into account email usage and web browsing, which will send those numbers even higher. If these numbers aren’t monitored closely, organizations will experience bill shock from overage charges when employees exceed their plan allotments. Verizon’s 4G LTE data plan allotments include 3GB, 5GB, and 10GB for $30, $50, and $80. AT&T has 3GB and 5GB plans for $30 and $50, and a 250MB plan for $15.

Expense Management Strategies

Delaying deployment of the new iPad will save some money because Apple plans to reduce the costs of the older iPad 2 devices. It will also avoid consumption increases from using the faster network. However, even the previous 3G version of the iPad consumes, on average, four to eight times the amount of data as an iPhone.

The biggest risk of bill shock will come from employees who do not realize how much data they are consuming. Organizations need to be proactive by updating their mobility policy and letting their employees know about these changes. Setting expectations is essential and digesting regular reporting on data usage is critical to driving down costs.