Author: Kevin Donoghue, CEO - Telesoft
It all started in 2013 with T-Mobile’s un-carrier strategy which ended the practice of providing subsidies for smartphones in exchange for two-year contracts. This past January, Sprint followed suit, along with AT&T. Verizon was the last major US carrier to stop its service contract program in August of 2015.
Now Sprint has come full circle with an offer that reinstates two-year service contracts to subsidize smartphones. This strategy is definitely one way that Sprint can set itself apart from competitors and offer customers more options.
With Sprint restarting its subsidies, customers have four options. They can:
- Pay the full price for the smartphone up front
- Lease it and pay the device cost over time
- Pay in monthly installments
- Sign a 24-month service contract with extra costs added to the monthly service fee
While this is targeted for consumers, enterprises need to develop policies to deal with the full range of programs that carriers offer. The average enterprise will replace all of its employees’ devices within 15-18 months of purchase, and the two-year Total Cost of Ownership (TCO) for devices is considerable. Factoring the support costs, security, and early replacement of devices, the TCO per employee can go as high as $3,500 to $4,500. Managers can reduce these costs by having clear policies that are enforced and getting rid of manual processes that are not scalable. It is also too complicated to manage mobile assets with software that is not designed specifically for this specialized area.
Enterprises need to maintain an accurate inventory in order to track eligibility dates for employees’ new devices. Automated routing of requests, along with a well-defined approval workflow, can manage the process more efficiently. This requires sophisticated software designed specifically for mobile devices and the tracking of assets. Wireless Expense Management (WEM) and Telecom Expense Management (TEM) software often have portals designed to address these issues, and organizations also need to establish a culture in which employees are held accountable for lost/stolen or broken devices. Sprints’ move to reinstate device subsidies is a wake-up call for enterprises to stay on the ball and choose the best option for both cost and flexibility for their users.