Trends and Best Practices to Control International Roaming Costs

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1 Trends and Best Practices to Control International Roaming Costs January 2012 Commissioned by: Conducted by:

2 Wireless Roaming Costs are Soaring, Says Study CCMI survey reveals that nearly 70% of the Fortune 1000 are battling increases in international wireless network service charges and that many have created formal mandates to reduce them. Introduction Contain costs! is a mantra you ll hear echoing down the halls of most businesses these days. Yet employees in multinational companies appear to be traveling abroad more than ever and, as a result, are ringing up hefty and growing international wireless voice and data roaming charges. CCMI conducted a survey in December 2011, of 128 Fortune 1000 companies regarding their international mobile roaming costs. The purpose of the survey was to understand current trends in international travel, international wireless spending and best practices used to control international roaming costs. CCMI s survey uncovered the following highlights on travel trends and roaming expenditure: Nearly 70% of the Fortune 1000 are battling increases in international wireless network services charges (see Figure 1, next page). 37% of the companies spend on average $1,000 or more per user per month on wireless roaming costs for their international travelers, and 12% of these companies find monthly costs soaring to $3,500 or more per user. Nearly 70% of the companies surveyed support employees that, on average, make four or more international trips each year, and more than half (57%) have users that travel overseas at least once a month, if not multiple times each month. 57% of survey respondents currently have formal mandates aimed at reducing international wireless expenditures (see Figure 2, next page). The question is: What tools and resources do enterprises have at their disposal to comply with their mandates and reduce the excessive mobile charges racked up by their international travelers? The remainder of this report will examine what enterprises have been doing to cut costs, how well those approaches have been working, and other options they might consider trying CCMI and Truphone, Ltd. All Rights Reserved. Page 2

3 Figure 1. International wireless roaming expenses are skyrocketing for a number of reasons: Globalization of business in general; the swift uptake in mobile data applications, smart phones, tablets, and broadband mobile networks; and hefty inter-country roaming and long-distance fees imposed by mobile operators. Figure 2. With mandates in place to curb international wireless spend, multinational corporations need ways to achieve their costreduction goals with minimal user impact. Traditional Cost-Busting Alternatives There are a number of steps enterprises can take to control international wireless costs. They have been met with varying degrees of success, as they each have both advantages and disadvantages. Most create at least some user pain points by requiring users to carry multiple devices, by creating user confusion by requiring different behavior or technology from country to country, or by greatly restricting 2012 CCMI and Truphone, Ltd. All Rights Reserved. Page 3

4 traveler usage and thus productivity while abroad. Let s look at a few cost-saving options and their respective upsides and downsides. Communicating the Policy. Clear employee education about what constitutes the enterprise s acceptable use policy and about what international wireless services cost has been the most fundamental way to curb expenses. Yet many traveling employees remain clueless about the charges they are racking up. Survey respondents to this report alone separately reported having suffered bill shock over single-trip, single-user expenses ranging from $10,000 to $200,000. We have large bills because of users not aware of roaming costs and best practices, says one survey taker. Given that two thirds of respondents (66%) said they have a policy in place on international roaming use, it would seem that employees simply aren t familiar with the policies, given the size of the bills that arrive following their overseas trips. Educate, educate, educate, advises a dismayed respondent who reported that an employee traveling to France racked up a $24,000 bill. Reports another: One of our employees had a bill for $200,000 for one month of services because they used our data plan carelessly. It was a nightmare for us. The SIM Card Shuffle. Some approaches have users carrying a bag of subscriber identity module (SIM) cards with them as they travel and swapping the cards in and out of their phones to get local rates in each country they visit. Nearly three quarters of the respondents (72%) have experienced swapping their service for local SIM cards. This is perhaps the most widely used option today. There are some downsides, however. This option changes the user s phone number from country to country, making on-the-road users more difficult to reach, particularly as travelers attempt to transfer calls from the home office to the phone they are using overseas. The multiple-sim card approach is also cumbersome for non-techie travelers who aren t familiar with how and where to get the SIM cards or, if procured for them, how to swap them in and out of their phones. Finally, some users get burned thinking they can forward calls from their primary cell phones to the international SIM; they don t realize carriers often restrict international call forwarding altogether. Expense Management Investments. Some enterprises have experimented with fixed-mobile convergence (FMC) equipment, which automatically transfers users onto a fixed-rate or free Wi-Fi connection when in the coverage range of a wireless LAN. They might also invest in wireless telecom expense management software packages to set and enforce policies for what wireless network behavior is allowed/disallowed when an employee crosses a border into another country (see Figure 3) CCMI and Truphone, Ltd. All Rights Reserved. Page 4

5 Figure 3. Automatically enforcing policy through the use of wireless expense management software can be most successful at slashing costs. It does, however, require an investment in a management platform and client software and can reduce user productivity if too restrictive. In some cases, the software will simply alert the employee that he or she is approaching a usage or dollar threshold or is about to incur a roaming charge, leaving it to the employee to take cost-cutting action. Some expense management software will simply prohibit usage beyond a certain level or in a certain region. This is the more successful cost-reduction option, yet it does negatively impact users productivity and ability to communicate. International Component to Domestic Plan. It s also possible to tag on an international component for a flat monthly fee to users North American wireless network service subscriptions that lower the per-minute usage charges and offer bundled megabyte data allowances associated with international travel. That certainly helps. Still, these plans often only reduce the inter-carrier roaming fees that mobile network operators charge one another when a subscriber crosses country borders and moves off one operator s network and onto another s. The business s primary carrier simply passes the significant roaming charge along to the entity paying the bill. In addition, the carrier usually requires advance notice of the travel so that it can activate the special rate while the user is traveling. This step is often worth the effort, yet it adds another layer of complexity that, if overlooked, can result in bill shock. Using Wi-Fi. Some companies encourage users to make use of soft phone capabilities by running a voice over IP (VoIP) application on their devices and making voice or data calls when within the coverage of a wireless LAN hotspot. This is a particularly attractive option for data, given the generous capacity of WLANs (up to nearly a gigabit per second, shared, depending on infrastructure used). It s a little more challenging for voice calls: the employee needs training in the VoIP application and, more importantly, call quality will likely vary from venue to venue, depending on how the operator manages quality of service (QoS) and call admission control, if at all. In recent news, some of the world s largest operators launched VoIP-based international calling services that run over Wi-Fi, which should be more reliable than using just any softphone application and hoping for the best. However, if users aren t in the range of a WLAN, they re out of luck. Also, sometimes security is a concern in public Wi-Fi hotspots CCMI and Truphone, Ltd. All Rights Reserved. Page 5

6 The Future of Global Communications The Global Carrier Emerging into the scene is a new option the Global Carrier. Truphone, for example, claims to drive 30-90% savings for international travelers. Traditional GSM carriers typically have a single SIM with a single identity. Truphone has a special multiple-identity SIM which allows for something they call Least Cost Roaming. Basically, it allows the identity which drives the lowest cost to be used without requiring any user intervention. It also allows a user to have multiple international phone numbers on one SIM/one device. Truphone s service works in over 2000 countries, and in what they call Tru countries, the users aren t even roaming; they are actually local, even while abroad. Gary Cohen, Senior Vice President and General Manager of Truphone, shared: Today, international travelers typically have to make one of two distasteful choices: either 1) use your wireless device as normal while traveling and receivee an outrageous bill, or 2) change your behavior in some way to reduce expenses, and becomee less productive and less accessible to your colleagues, customerss and other important contacts. Cohen continued: Truphone offers an alternative: use your mobile device as normal while traveling, and receive a reasonable bill. This option appears to be an elegant solution to today s current challenges. Traveling Trends Nearly 70% of the companies surveyed support employees that, on average, make four or more international trips each year, and more than half (57%) have users that travel overseas at least once a month, if not multiple times each month (see Figure 4). Figure 4. A big chunk of Fortune 1000 companies (89%) have employees thatt travel internationally at least 4 times per year. In addition, well over a third (36%) of respondents said that more than a fifth (20%) of their users travel internationally, and 14% of those said that more than 30% of their employees do so. As a result, businessess need to take a top-down, structured approach to figuring out how to take a big bite out of international wireless roaming costs without taking an equally big bite out of their traveling employees time and productivity. When asked what their international wirelesss provider could do to improve service, many survey respondents cited actions having to do with cost control CCMI and Truphone, Ltd. All Rights Reserved. Page 6

7 Have the wireless provider provide better international plans, says one respondent. Current plans do not provide much in the way of international coverage, usage, data, or alternatives. In fact, when asked what kinds of problems international wireless roaming had caused their companies, far and away the greatest number (nearly 63%) specified high wireless charges as a problem they faced (see Figure 5). Has international wireless roaming and its associated cost caused your company and/or its employees any of the following specific problems: Lack of data security due to use of unsecured, public networks Lack of access to network resources Restricted communications with suppliers and/or business partners Restricted communication with clients Restricted communication between employees Challenges with customer support while abroad Lost productivity Lost business Complaints from employees % % % % % % % % % High wireless charges % Figure 5. International wireless roaming has caused a whole host of issues for businesses. Conclusion Businesses are going global and employees are continuing to travel internationally. As a result, they re seeing a steep rise in global communications costs and usage, even as they create wireless cost-cutting mandates and otherwise struggle to contain costs overall. There are a number of ways to reduce international wireless spend. The most basic is clear and vehement user education about what services cost accompanied by general best-practice usage tips. In addition, businesses can employ a number of tricks ranging from SIM card options for getting local incountry rates to deploying policy-based expense management software to offloading their voice and data connections onto flat-rate, or free, Wi-Fi where possible. Each option has both pros and cons, but employing a mix of the various available cost-cutting tools will help companies avoid the palpitations that otherwise might follow the receipt of an overseas traveler s latest wireless bill. Finally, emerging global carrier options, such as the service enabled by Truphone s multiple-identity SIM, are expected to be the future standard of global mobile communications if they indeed allow enterprises to let their business travelers use their wireless devices abroad as they would in their home country, but absent of the fear of bill shock CCMI and Truphone, Ltd. All Rights Reserved. Page 7

8 About Truphone Truphone is the world s first truly global mobile carrier, helping people and businesses around the world thrive. We provide communications services that save them money and simplify their lives. Founded in 2006, the company uses innovation to drive convenience up and costs down. The company s flagship GSM service, Tru, helps international business by delivering significant savings via local rates while abroad and Tru s least cost roaming. Tru service works in over 200 countries around the world. Truphone is currently selling its service in the UK and will be broadly selling in the US and several other countries this year. Truphone offers multiple local numbers on one SIM card, allowing customers and contacts to reach each other without footing the bill of high international call charges. The company is also a pioneer in the mobile VoIP space. It launched the first downloadable mobile VoIP app for Nokia in 2006 and has since been the first on the iphone, ipod and ipad devices. Tru s application supports all leading mobile platforms and devices including Blackberry, iphone, ipod touch, ipad, Nokia E and N series, and Android. For more information, please visit About CCMI CCMI is the industry s leading provider of telecom rate and data solutions and information. We are dedicated to delivering relevant, highly specialized and strategically focused content. Find a complete product listing at CCMI publishes Voice Report, the leading independent source of telecom news, analysis and award-winning guidance on communications technology services and equipment for the enterprise. For analysis and guidance on the latest telecom happenings, visit and sign up to receive updates CCMI and Truphone, Ltd. All Rights Reserved. Page 8