Data Debate

By  Andrew M. Seybold — September 04, 2009

Let me say this right up front -- whatever you pay for broadband wireless access for your employees, it is worth every cent. The return on investment (ROI) can be measured in weeks or months, not years.

Having access to information whenever it is needed provides one of the most significant productivity increases available today. In fact, wireless generally sells well during times of recession because it enables customers to do more with less. For example, you can add wireless to your service vehicles for better efficiency so you won't have to add another vehicle or new employee.

Even though most of you have heard about increased productivity and early returns on wireless data investments for years, you still have to deal with the reality of your budgets and the amount of money you have to spend on these types of services. This makes it important to buy smart and to make sure that what you pay for wireless data services is the lowest it can be.

Before looking at pricing for wireless data service, let's consider the devices. First, PC Card and USB wireless modems are available for little, if any, cost. These can be given to employees or kept in a pool and signed out by those who travel infrequently.

The best bet, especially if it is time to buy new notebooks, is to buy units that have built-in broadband data devices. These are available in an increasing number of notebooks and now in netbooks, and there are two types of embedded broadband devices.

One is wireless network-specific, e.g., it would work on Verizon Wireless and Sprint but not on AT&T or T-Mobile, and vice versa.

The second is what I recommend to anyone buying new notebooks or netbooks -- it is a Gobi chipset made by Qualcomm that is designed to support both 3G standards and most of the frequencies in use around the world, and it is showing up in more and more devices.

The advantages to you and your company are twofold:

  • You can purchase the notebooks or netbooks knowing that you can change network operators anytime you want to, without having to send the units back to have their wireless modules swapped out.
  • No matter what wireless network you are using in the United States, your employees who travel internationally can make use of wireless broadband services in virtually any country and, in many cases, not have to pay high data roaming charges.

Then, of course, there are smartphones. Whether they are BlackBerrys, iPhones, Windows Mobile phones or any of the operating systems, having a broadband connection to these devices will also be beneficial.

In general terms, however, equipping your outside people with notebooks or netbooks will give them an experience that is closer to their desktop systems, which will cut down on your support costs. In either case, having access to wireless broadband without having to find a WiFi hotspot and sign on in the clear is a much more secure way to connect back to the corporation, and all of today's broadband providers support VPNs and other security measures.

 

What's It All Cost?

A year or so ago, most of the U.S. wireless industry changed from all-you-can-eat data pricing to monthly fees based on the amount of data consumed, with additional fees for every megabyte of data over the allocations.

According to AT&T's published prices (what a consumer with one device will pay), for a BlackBerry, unlimited data services are $35.00 per month; if you want to use your BlackBerry as a modem for a notebook (tethered), it will be $65.00 per month for 5 GB of data. Currently, AT&T only offers consumers one plan for notebooks and netbooks, and that is $60 per month for 5 GB of data.

Verizon Wireless prices data in a few different ways: 250 MB of data per month will cost consumers $39.99 per month, or they could opt for the 5 GB plan for $59.99 per month. BlackBerrys offered by Verizon are only available in bundles of voice and data, and start at $79.99 per month up to $129 per month.

Sprint is about the same as the other two at 5 GB for $59.99 per month, or 300 MB per month when you are roaming off its network.

T-Mobile has some very confusing pricing. It says on its website that for $39.95 per month you get unlimited data for "Internet" access, but the line below that says if you want a webConnect data plan, that will cost $59.95 for 5 GB of data.

None of the major carriers' sites provide pricing for business customers, and all refer you to a B2B sales organization.

 

So, What Should You Pay?

The price you pay to meet your enterprise data requirements depends on how many lines you need and how good a negotiator you are.

A greater number of lines typically means the lower your individual monthly fees will be. As with any negotiations, the more you shop your data requirements around, the better pricing you will find.

But the wireless network operators don't make it easy for you to compare the various plans. You can negotiate for several different types of plans, and this gets really interesting if you have notebooks or netbooks with the Gobi chipset, since you will have the option of changing networks quickly and easily.

You can get a monthly per-user contact, or a bucket of data that can be used by everyone in the company, depending on which option results in the best pricing. You will also want a price reduction guarantee, so that when data price points drop, as all wireless pricing does, you will automatically get the reduction.

There is a new way to purchase data services as well. Verizon and Vodafone, for example, will sell 24 hours of data services for about $12. This is a good way to buy for your organization's occasional travelers, since you don't have to maintain a subscription for them. AND you will save a lot of money when they travel overseas.

If your company has a contract with Verizon (EV-DO) and your staff flies to London (Vodafone UMTS/HSPA), you can give the travelers a Gobi-equipped notebook or a UMTS/HSPA device and they can purchase wireless broadband services by the day, again, for around $12, and your company won't be stuck with data roaming charges that can add up quickly.

As far as I know, Verizon and Vodafone are the only two carriers offering this deal at the moment, but as you negotiate with the network operators, you can request this service, and I believe it will become a standard option for pricing data services.

Don't for a moment believe you can only deal with one network operator at a time for your entire fleet. Sometimes it makes sense to divide your business between two or more network operators. In some cases, each of them will come back repeatedly trying to win the rest of your business, and this will work to your advantage.

You should also ask about becoming a customer without a one-year or two-year contract. Of course, the network operators don't like this and will give you a hundred reasons why it is not a good idea, but if you have a large enough company and they really want your business, you will be surprised at what you can accomplish.

There is no set wireless broadband pricing for business customers. It depends on the number of devices, the types of services you want, and how good you are at telling them what you need. What should you be paying, how much data bandwidth to you really need, and what the heck is 5 GB of data anyway?

To give you some perspective, based on discussions conducted by Andrew Seybold, Inc., with IT executives representing several thousand enterprise end users, it appears that most business executives use fewer than 80 MB of wireless data per month, field workers more. If you watch your organization's data usage on a per-user basis, you can easily determine what your averages will be.

By the way, if your users leave their notebooks connected with Outlook running and don't even touch the keys for an hour, they will use more than 1 MB of data--Outlook is a very chatty program.

The bottom line is that your organization should end up paying less for your enterprise data than the carriers' advertised consumer pricing. It is difficult to provide guidelines here, but the lowest pricing I have seen for data is in the $20 per month per user range, while the average is closer to $40 per month.

One trick you can use is to make your buy toward the end of a quarter, when the network operators' sales forces are scrambling for new net ads that can be reported at the end of that quarter. Wall Street rates network operators on net-adds, churn, and Average Revenue Per User (ARPU), so if a network is short on net adds, it is more likely to give you a better deal.

The best thing you can do is negotiate hard and make sure the network operators know you could split your business and/or your employees have equipment that can be used on any network. Keep the carriers on their toes and your enterprise will reap the rewards.

Related Articles

Gartner Says Enterprises Overspending On Wireless Costs (And Reveals Where)

J.D. Power & Associates Rates Wireless Carriers


Andrew M. Seybold is President/CEO of consulting firm Andrew Seybold, Inc.

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