Mobile Market Dysfunctional for Multinational Customers
Multinational Companies (MNCs) cannot get what they are looking for on the mobile market, which is: cross-border one-stop shopping; one-stop billing; centralized management; and last but not least, reasonable prices. These are the main conclusions of a new study by INTUG.
INTUG has put together a paper on the problems MNCs experience in the mobile market when they seek to centrally manage and rationalize the use of mobile communications, whether in a region or globally.
The paper highlights that providers have no consistent offering across their coverage region, which results in an incoherent patchwork of services, bundles, pricing schemes and management capabilities. Mobile operators concentrate more on private mass market consumers and domestic profitability, while neglecting to create a competitive advantage by offering MNCs and SMEs in the business market a consistent and fairly priced international services package.
For a long time, companies have managed their regional or global voice and data networks in a centralized way in order to create a consistent, secure and price effective service that corresponds to their needs. Attempts to do the same in the mobile market systematically fail, because providers are not geared up to satisfy these requirements.
The cost of international mobile communications is also staggering, compared to calls over the fixed network. While it is understood that mobile communications still come at a premium price today, the international rates seem to be disconnected from any cost-based model. Roaming tariffs (rates for making or receiving calls on a mobile while abroad) jump to a multiple of a domestic call, even though the international portion of the mobile call goes over high speed international trunks run these days at fairly low cost to the operators.
When using mobile data abroad, the situation only gets worse, as many reported bill shocks prove. This forces companies to limit data service usage, which in turn handicaps operators from further developing the market. Only when price levels are reasonable will professionals increase their use of mobile data services.
INTUG is therefore calling upon suppliers of international mobile services to move away from country-based selling models and to create multi-country business units with their own P&L that offer the kind of service multinationals need, which is specifically: one-stop shopping, one-stop billing and centralized management of mobile communications at fair and reasonable cost-based and transparent prices.
At the same time, INTUG is calling upon the European Commission and BEREC (Body of European Regulators of Electronic Communications) to intervene in this dysfunctional market, in which consumers as well as companies are ripped-off when using mobiles abroad.
With today’s communications technology, there is no fundamental reason why mobile communications should cost a multiple of fixed communications. It is also fair to expect that regional roaming costs should disappear over time. However, it appears that new legislation will be indispensable to get there.
Finally, INTUG recommends that representatives of business customers act, and challenge the mobile operators to offer them the services they need at realistic prices. Technologically, there are no fundamental barriers preventing this from happening. It is a matter of willingness, organization and entrepreneurship.
Download the paper International Mobile Services and the Multinational Customer – A Dysfunctional Market.
Download the full press release.
Source: INTUG
March 5th, 2010 at 6:32 PM
Having worked at a mobile operator, offering multinational mobile communications to multinationals, I understand fully the frustration of many potential customers (Symapc, a KPN entity halted its operations by july 2009). One has to understand what these MNC are looking for: 1) Manage the fleet, 2) central overview of the spending while the cost allocations are still with the different units. 3) And in a later stage use the collected, consolidated factual information in order to negotiate best tariffs cross border.
Solutions to manage communications cross border do exist and can be deployed (and are deployed). The author rightfully points to the differences of the US geographic market (2-3 mobile operators to cover) and European geographic market (over 20 mobile operators, hence different languages, and invoice/billing formats).
The services that I deploy address all of these: a multinational has insight in his communication spending: cross-border, cross-units up to the individual. Only, it has to be accepted that this can not be solved with Excel (majority of cases) nor MS Access as operators produce zillion of data where inexperienced personnel will quickly not see an outcome let alone they can extract busines operational info and analysis.
Only when this information is produced, MNC’s can see and use this info to produce savings. (Mobile) operators will not proactively work on this and produce this information for their customers as finally that information will result in a lower revenue / profit ( they are extremely happy with the confusion that reign under their customers …)