INTERNATIONAL MOBILE COMMUNICATIONS: HOW TO BALANCE CONNECTIVITY, PRODUCTIVITY AND COST CONCERNS

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1 INTERNATIONAL MOBILE COMMUNICATIONS: HOW TO BALANCE CONNECTIVITY, PRODUCTIVITY AND COST CONCERNS Author: Michael F. Finneran Principal dbrn Associates, Inc. Commissioned by:

2 INTERNATIONAL MOBILE COMMUNICATIONS: HOW TO BALANCE CONNECTIVITY, PRODUCTIVITY AND COST CONCERNS EXECUTIVE SUMMARY International wireless roaming is an ongoing concern for companies that do business overseas. A recent CCMI survey has revealed that midmarket and large enterprise companies are attempting to control escalating international wireless roaming costs in any number of ways, primarily by modifying employees mobile usage as they travel internationally. The downside of that is that employees may be less accessible to customers and colleagues and generally less productive. Survey respondents report that these measures have had some amount of success in reducing costs, but that is partially offset by lost business, lowered user productivity, user complaints and security risks. In September, CCMI polled 201 companies, half of whom had 100 to 1,000 employees ( midmarket organizations) while the other half had 1,001 to more than 50,000 employees ( large enterprise organizations), and queried them about their international wireless roaming costs, trends, and steps they were taking to control those costs. Of the large enterprises surveyed, 44% spend over $1 million annually on wireless services as did 29% of midmarket respondents; 68% of those large enterprises were managing over 1000 cell phones. Of the respondents with knowledge of their companies international roaming costs, 36% saw an increase. Among large enterprises, that percentage is down substantially from the 55% who saw roaming costs increasing in our 2012 survey. The challenge for all companies with international travelers is to strike an appropriate balance between cost, ease of use, and providing employees the means to be accessible while getting their jobs done when on the road. The right balance is a program that aligns the company s strategic mobility goals, its IT budget and its security posture. So while programs that involve swapping SIM cards, or curtailing international usage might be acceptable in some organizations, in others they would be out of the question. Companies today continue to employ a number of methods to control costs while maintaining that balance. The challenge will be to select the right mix of strategies for the company s users, culture, and business requirements CCMI 1

3 KEY FINDINGS Some 49% of large enterprises reported that their mobile voice usage was increasing versus 39% of midmarket companies; roughly two-thirds of both groups reported their text and data usage were increasing. A majority of large enterprises (55%) have policies in place that either curtail/limit or outright forbid wireless device usage internationally. That is a substantial increase from our 2012 survey when only 40% of large enterprises had such a requirement. Only 28% of midmarket companies have such a mandate to reduce or forbid international wireless device usage. Among large enterprises, 40% report average monthly cost per user per month for international roaming at $1,000 or more, and 13% reported it reached over $3,500 per user. Nearly one-third (31%) of midmarket companies reported monthly per user costs over $1,000 and 8% exceeded $3,500 monthly.. The cost of state-side users communicating internationally are also significant, and roughly a third of respondents report that they use Skype or other consumer services for some portion of that communication. High cost ranks at the top of the list of challenges with international roaming with 45% of respondents citing it, followed by customer support (26%), lost productivity (25%), and 20% point to lost business. Lack of access to cloudbased services like Salesforce.com also registered as a key pain point, particularly at larger enterprises. Companies are using a variety of strategies to reduce international roaming costs including subscribing to the carriers international roaming discount plans, using local or pre-paid SIMs, and maintaining international loaner phone pools. TRIALS AND TRAVAILS OF INTERNATIONAL ROAMING Despite the increasingly availability of collaboration and conferencing technologies, businesses continue to expand globally, and these expansions frequently call for face-to-face contacts. Respondents in nearly three quarters of midmarket and large enterprise companies surveyed this year said they had employees who travel internationally four or more times per year (see Figure 1). That travel affects their companies annual wireless spend, sometimes in unpredictable ways. Figure 1. How often do employees travel internationally on average? 4 or more trips 3 or fewer trips 26.7 % 35.0 % 73.3 % 65.0 % 2013 CCMI 2

4 That results in bill shock when the invoice arrives at the end of the month. One respondent noted a colleague managed to run up a $5,200 wireless bill during a 7-day trip to South Africa. Survey respondents identified a number of challenges and associated costs related to international roaming. High wireless charges led the list for both large enterprises (48%) and midmarket companies (42%). Other pain points included lost productivity, lost business, challenges with customer support, access to internal networks and cloudbased services like Salesforce.com, and restricted communications with employees, clients, and business partners (see Figure 2). This goes to show that there s more at stake than just high bills when business users are traveling internationally. Figure 2. Have international wireless roaming challenges and the associated costs caused your company and/or employees any of the following specific problems: High wireless charges No negative impact has been reported Challenges with customer support while abroad Lost productivity Lost business Lack of access to cloud-based services Lack of access to internal network resources Restricted communication Lower company credibility Complaints from employees/customers Lack of data security from unsecured, public network use 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% HOW COMPANIES ARE BATTLING HIGH COSTS The ideal solution for international roaming would be for every user to be able to use their phones just as they do at home, have the same number, the same voic , and access , apps, and media the same way they do at home anywhere in the world and pay the same price. Unfortunately the international roaming plans offered by the mobile operators do not allow for that and hence users must create their own strategies to contain costs while keeping their traveling personnel accessible and productive CCMI 3

5 Lacking the ideal solution, organizations have resorted to any number of strategies to curtail international roaming costs. Surprisingly, only 36% of large enterprises and 41% of midmarket companies make use of the international roaming plans offered by their carriers. Approximately 47% of responding companies use local or pre-paid SIM cards, which require the user to swap the SIM in their phone. That is a significant drop from our 2012 survey when two-thirds of midmarket and three-quarters of large enterprises made use of local or pre-paid SIMs, so the aggravation factor involved with swapping SIMs may be having an effect. Another 20 to 25% maintain international loaner phone pools. Of course the problem with either of those strategies is that the user has a different phone number while traveling and their voic messages wind up in the mailbox associated with their regular number. The user can advise their regular contacts of the new number, but how can you tell who is going to want to reach you? And the user winds up placing a lot of expensive international calls to their regular number to check for messages. Some organizations make use of Wi-Fi hot spots with either smartphones or laptop softphones, but that was more prevalent among midmarket companies. In those companies 29% used hot spots with softphones and 22% with smartphones; the equivalent numbers with large enterprises were 21% and 19%. That s down substantially from our 2012 survey when 42% of midmarket companies and 47% of large enterprises reported using Wi-Fi to reduce costs. A small percentage (14% among midmarket companies and 11% among large enterprises) took no steps at all and basically accepted international roaming as a cost of doing business. Figure 3. What measures has your company implemented to reduce international roaming and communications costs? Curtail/limit international wireless device use Use carrier's international roaming discount plans Use local SIM cards Use international loaner phone pool Use an international roaming service Leverage wireless expense management solution Free Wi-Fi hot spots w/ smartphones abroad Leverage MDM excessive int'l usage alerts Free Wi-Fi hot spots w/ laptop softphone abroad Use pre-paid devices/sims Forbid wireless device use internationally None; accept as cost of doing business None, but we are considering options 0% 10% 20% 30% 40% 50% 2013 CCMI 4

6 The survey also found that only 26% of midmarket and 24% of large enterprises utilize the international roaming services of their domestic carriers, despite the fact that over 90% said they would be willing to use an alternative wireless carrier in order to improve productivity, better the service experience, and reduce overall costs associated with international mobile services, particularly if the quality, reliability and user experience were comparable to or better than their current carrier(s) (see figure 3). We also asked about the use of international communications by those who did not travel internationally and found this was more prevalent at larger enterprises. While most made voice calls from desk and mobile phones, international video conferencing was used by 50% of large enterprises and 34% of midmarket companies. One surprising finding was that 35% of midmarket companies and 30% of large enterprises reported using Skype or other consumer services for international communications (see Figure 4). Figure 4. Do you have employees who may not travel internationally, but need to communicate with international contacts on a regular basis? If so, what tools do they use? Yes, via Yes, via desk phone and international long distance Yes, via mobile device and international long distance Yes, via video conferencing Yes, via SMS/Text Yes, via Skype or similar consumer services Yes, via Unified Communications No, our employees do not communicate internationally 0% 10% 20% 30% 40% 50% 60% 70% 80% MOBILE POLICY At approximately 45% of responding companies, mobile policy is still managed on a country-by-country basis, though 42% of large enterprises and 36% of midmarket companies are working toward a global policy. Some 49% of large enterprises and 45% of midmarket companies have or will soon have a centralized global policy for wireless. Respondents report having a number of people involved in developing the international mobile communications policy including the CIO/IT Executive, the Telecom Director/Manager, the CEO, the CFO, and even the Human Resources Department. Some 20% of large enterprises and 16% of midmarket companies reported having a Mobility Director/Manager involved, though that position does not exist in most companies (see Figure 5) CCMI 5

7 Telecom Director/Manager Mobility Director/Manager Figure 5. Who decides on your company s international mobile communications policies? CIO/IT Executive CEO CFO Human Resources Procurement Department We do not have a mobile Other 0.0 % 20.0 % 40.0 % 60.0 % At 41% of large enterprises that policy is designed to restrict international roaming use; only 21% of midmarket companies have such a policy. From this and the fact that a substantially higher percentage (43% versus 18%) of large enterprises require users to curtail or limit wireless device use internationally, we can infer that large enterprises are exerting greater control on international roaming costs where midmarket companies are more concerned with getting business done. We also asked respondents about their use of wireless expense management systems, and found that of those familiar with these systems, 67% of large enterprises had them in place as did 62% of midmarket companies. However, only a minority of them (23% at large enterprises and 27% at midmarket companies) found them not to be effective in managing international roaming spend. The survey also found significant differences in the acceptance of bring your own device (BYOD) programs. Among large enterprises, 67% either explicitly or tacitly allow users to bring their own devices for work, but that is the case at only 51% of midmarket companies; 11% of large enterprises and 7% of midmarket companies banned BYOD outright. With regard to smartphone preferences, Apple smartphones are used by the most companies followed by Android and BlackBerry. In larger enterprises, BlackBerry is used by slightly more companies than Android, but it trails 21% to 31% in midmarket firms. Surprisingly, Windows Phone is being used by 16% of companies, despite its estimated 3% worldwide market share (see Figure 6) CCMI 6

8 35.0 % Figure 6. What percentage of your smartphones are % 25.0 % 20.0 % 15.0 % 10.0 % 5.0 % 0.0 % Android Apple ios BlackBerry Windows Phone BUSINESS RAMIFICATIONS OF CHANGING USER BEHAVIOR It is challenging enough to get users comfortable with using their mobile devices in ways that comply with corporate standards for expense management and security in their home country. When we ask them to start fiddling with SIM cards, swapping phones, or using new and unfamiliar services, we face two possibly undesired outcomes. One is that users simply abandon their attempts to communicate and conduct business altogether, potentially resulting in lost sales, poor customer service, delayed decisionmaking and the other hazards of being out of the loop. The other undesired outcome is that with time restraints, desperation, and the overall stress that often comes with international travel, they simply bypass the complexity and use their devices in the way that they know and are comfortable with. That will allow them to maintain productivity, but at a significant cost to the business. However you slice it, the state of international roaming today is causing pain to companies, either in the form of big bills, restricted user communications, lost productivity, or compromises in security. Multiple Strategies to Control International Roaming Costs Everyone agrees that the ideal situation would be one where the user could simply take their mobile device anywhere in the world, use it just as they would at home, and pay the same price. Unfortunately, that option isn t being offered by the traditional carriers, and organizations must find a plan that offers the best saving while minimizing inconvenience for the user CCMI 7

9 According to our survey, the most widely used option is to sign up for the discounted international calling plans offered by the mobile operators- convenient, but still a costly option. Others have the user swap out the SIM card for one registered in the country they are visiting so they are charged local rates for local calls. Many users aren t comfortable messing around with SIMs, and the new SIM comes with a new number! If the user plans ahead, he or she can forward their desk number to the new mobile number, but that s a lot of set up when you re getting ready for a trip. In the meantime, all of their voic s will be going into the mailbox associated with their regular number making them less accessible. There s also the option of using a client on the smartphone or laptop that operates on Wi-Fi rather than the mobile operator s service, but that requires that the user find a Hot Spot, and one with enough available capacity that voice quality is not impacted. Of course they typically won t know that until they place a call, and they still will need cellular capability to receive calls. And IT will need to train them in how to use the new arrangement. CONCLUSION AND RECOMMENDATIONS As we found in the survey, the cost and pain of today s international roaming arrangements aren t unique to Fortune 1000 companies, but affect midmarket companies that do business internationally as well. Organizations of all sizes indicate that they feel compelled to choose between the lesser of two evils as their populations of international travelers grow: 1) let users continue to use their mobile devices just as they would in their home markets and pay dearly for the privilege or 2) change employee usage behavior so that they consume fewer minutes and megabytes. Many of the available options can be onerous for users not adept at swapping out SIM cards, changing network settings, or forwarding their mobile to a different number. This is particularly acute for executives who may be traveling overseas to conduct the highestvalue business. Curbing their accessibility and productivity can cost the company dearly. The fact that international travelers are on important business is evidenced by the fact that their companies can justify the expense associated with sending them abroad. The nature of business dictates that companies will grow only more global and we will see more use of cross- border wireless network services. Aside from hoping for regulatory change that would lower roaming and settlement fees among carriers in different countries, organizations seeing their international wireless costs escalate would be wise to seek innovation in this market CCMI 8

10 That innovation could take a number of different forms. International network service resale plans could appear that keep usage costs in check while allowing users to use their devices in the same familiar way. Organizations could increase their investments in WEM software and cloud-based WEM services that enable a degree of automation in keeping costs down without users having to worry about it and take proactive (and timeconsuming) actions. These options all have pros and cons. Meanwhile, newer service options such as services with technologically-advanced SIMs that provide multiple international mobile subscriber identities make it possible for companies to strike that all-important balance between accessibility and cost, and provide travelers with local numbers in a number of countries. Such multi-identity SIMs, in combination with network-based intelligence and negotiated rates, let employees use their existing wireless devices abroad just as they would in their home country so that usability and productivity remain consistent. What s more, this approach can make them accessible via a local number in a number of countries while cutting international roaming bills significantly, eliminating the high anxiety about bill shock CCMI 9

11 About Truphone Truphone is the only mobile operator in the world that expands the reach of businesses beyond the borders of their home country. Truphone provides multiple international numbers on a single SIM and eliminates or reduces mobile roaming costs for voice and data services, keeping customers better connected when they travel. Find out more at About CCMI CCMI provides specialized, intelligent telecom data solutions and content-rich resources to the enterprise market. Working with expense management providers, CCMI provides companies with the necessary rate and jurisdictional information to improve their telecom expense management solutions. CCMI also delivers independent market research and analysis, tightlyfocused educational webinars and industry-leading conferences, enabling its customers to work more efficiently and save money with reliable content and superior customer service. To learn more, visit About Michael F. Finneran, Contributing Author Michael Finneran is principal at dbrn Associates, a full service advisory firm specializing in wireless, mobile security, and unified communications. Along with providing consulting assistance to carriers, equipment manufacturers and end-user organizations, Michael is a frequent speaker at industry conferences including InterOp, Enterprise Connect, and the Information Week 500. He has published over 300 articles as well as numerous white papers and market reports. His blogs appear regularly in Information Week, NoJitter.com, and UCStrategies.com, and the Voice Report. Michael is a member of the Society of Telecommunications Consultants and he has a Masters Degree from the J. L. Kellogg Graduate School of Management at Northwestern University CCMI 10