By Guest Contributor Gary Young
Business owners tend to review their costs such as rent, insurance and staffing at least annually but the cost of telecoms cost often gets left out. This may be because people don’t think they can save much.
However, the evidence suggests otherwise. Let’s look at what has been happening in the telecoms market that is affecting pricing and then look at the steps you can take to reduce the amount your business is paying for telecoms, broadband and mobile.
What’s been happening in telecoms?
Operator revenues have dropped
Operator reported revenues  between 2012 and 2017 dropped by 8% but the number of fixed phone lines stayed the same and the number of fixed internet connections increased by 19%. By definition that means unit costs are falling.
Consumer Telecoms spend
Between 2017 and 2018, the average consumer household spent 8.5% less  on their telecoms. If anything, the consumption of telecoms is going up (more data, more calls etc.) so this strongly suggests that it is costs that are dropping. And this applies to businesses too.
Mobile Data costs
Consumer and business mobile data tariffs have plummeted over the last few years. In 2015, the cost of 1Gb of data  was about £10. Today you can get business deals for data at less than £1 per Gb and, even, Unlimited data for £30 per month.
We have any number of case studies where we have saved somewhere between 30% and 80% for companies and schools.
Recently released data from Onecom shows that SMEs are spending, on average, £2,052 per year on telecoms. Is 30-80% of that amount worth doing something about?
Ways to save money on your telecoms
Don’t let your contract default to standard terms
Many telecoms contracts are for an initial term, perhaps two years. After that, the terms, and prices, can often change for the worse. Make sure that you review your options before the contract’s initial term finishes. Make sure that your review takes place in sufficient time that, if necessary, you can give notice to your current telecoms supplier. Many companies try to add long notice periods so that you are tied into them for the long term.
Your call patterns
Do you make lots of long calls or a large number of short calls? Fixed line call tariffs are, generally, either cost per call- or cost per time-based. If you make lots of calls and pay per call, you are almost certainly paying much more than you should and would be better off using a cost per second tariff.
The right number of lines?
If you have an ISDN-based phone system, how many lines are you paying for? If your business has changed significantly you may be paying for lines you no longer use. If you are still in contract, you may not be able to change that number, but if you are past your minimum term, you will be able to.
Switch to VoIP
Openreach aims to stop all ISDN-based services by 2025, so you will have to switch relatively soon, but the benefits of VoIP mean you are highly likely to be able to save money by switching sooner rather than later:
- Lower call costs
- Ability to change line count, up and down, as needed
- Making maximum use of your internet connection will also deliver economies of scale.
Time to pay for calls, texts and data only?
Once you reach the minimum term on your mobile contract, you have paid off the hardware part of the monthly cost. If you don’t yet need to upgrade the hardware, you should talk to your mobile operator about only paying for the calls, texts and data.
Find cheaper phones
The mobile operators are not always the best people to get your phones from, particularly if you are buying in bulk. Better deals can, almost always, be found elsewhere. Even if you don’t want to add this to your Capex (capital expenditure) spend, you can always ask the mobile operator for the hardware fund. You can then spend that elsewhere, and pay it back to the operator on a monthly basis.
Are unlimited calls needed?
Many businesses take out unlimited call contracts for business mobiles just in case people make huge numbers of calls. You may not be making the savings you expect by doing this. It’s like an All You Can Eat at your local Chinese or Indian restaurant; they rely on the fact that you will eat far less than you expect. It’s the same for the mobile operators.
If you are in an area with poor internet connections, look at alternatives that are air-based. Line of site, satellite and 4/5G are all options to consider. Some may be short terms options until a bigger line is installed. Others may only really be suitable for smaller businesses – but don’t automatically take the Openreach controlled option. There are alternatives, and they are often just as suitable, if not more so, and cheaper.
In addition to the above it is well worth thinking about productivity. If you decide to save money by installing a slower internet connection you may find this has a negative affect on staff productivity. The net result could be frustrated employees and overall a higher cost to your business.
It is generally the case that the more time it has been since you reviewed your telecoms setup the more you have the opportunity to save. If like many businesses, you haven’t looked at your telecoms costs for five years it is time to find some expert help and get yourself the best deal available.
About the Author
Gary Young is Director of independent telecoms brokerage Equinox. Gary works with companies, charities and other organisations to help them choose the right telecoms packages for their needs and thereby reduce their costs. He is particularly knowledgeable on the integration of IT and telecoms in business.
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