When did you last review your business telecoms costs? If the answer is: “Several years ago” you are not alone. For some reason business owners will review pretty much every other cost on a regular basis:
- Rent at every lease review
- Insurance costs are reviewed at every renewal
- Even, staffing costs are reviewed regularly – usually at pay rise time
But fail to review their telecoms to see if they can save money. This may be because there is a belief that the savings are likely to be so insignificant that it’s not worth the time. Let’s see if we can pin down some evidence on what is happening in the market.
- 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.
- 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.
- 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.
- Unmonitored costs
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 figure worth doing something about?
Ways to save money on your telecoms
Do you make lots of very short calls or do you tend to make long 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.
Too many 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.
Don’t switch 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.
Switching 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.
Consider the airwaves
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.
Do you need unlimited calls?
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.
When you’ve paid off the hardware cost…
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.
Best price for 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.
Most of what has been discussed above is based on the cost of the telecoms connections. However, it is also worth looking at productivity costs too. Saving money on an internet connection by installing a slower connection may save you a few quid per month, but if it means your staff cannot work effectively, you are losing money on productivity. Sometimes cheaper isn’t better.
The school mentioned above hadn’t reviewed its telecoms costs for almost 10 years, and the average business hasn’t done so for nearly five years. Given the general rule that the longer you’ve left it the greater the potential savings, is it time your business undertook at review? Assuming the answer is “Yes” find an expert to guide you and you may be pleasantly surprised by the savings you can achieve.
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.