Will Android Make Expense Management Easier for Smartphones?

It’s not as smooth looking as the iPhone. The interface isn’t quite as fancy. Still the first Google Android based phone is here. The T-Mobile G1Â went on sale two days ago to largely positive reviews. Priced to compete with the iPhone, the question is whether its features and flexible pricing can compete with sheer Apple buzz. Naturally, from a telecom expense management perspective we’re interested in the pricing, but let’s get into the phone first.

T-Mobile’s marketing angle is simple. It distills the familiar desktop down to your screen and promises the same web surfing experience you’d get from a PC. In addition, the G1 comes loaded with popular Google applications. Notably, Google Street View aligns with how you’re holding the phone based on its built-in compass and accelerometer. Neat, but then again, Street View is often just used as a toy. The more interesting aspect of it is Android’s open standards commitment (and eventual open source release, say Google execs). This means that if consumers bite, the Android Marketplace for apps could explode with new widgets at a rate Apple could never hope to match with its own carefully managed, closed approach – if people can get past the G1’s brick shape.

For cellular expense management, one thing leaps out: T-Mobile actually lets you choose from a bunch of plans, while an iPhone sticks you with a tightly restricted set. This flexibility will give us a lot more power to keep G1 fees down, but the real breakthrough will come when other 3G handsets offer Android with a slightly downscaled set of features to drop into the lower end of the smartphone niche. These phones could serve as an alternative choice for corporate fleets that rely on Blackberries, assuming that push email client Funambol offers comparable service. Some will insist on Exchange for interoperability with the office, but open source means the price point can drop more rapidly once Android hits budget devices. At that point, some people will take a long, hard look at how they really use mobile mail, and whether the G1’s descendants would be the smarter choice.

Telecom Expense Management for the Brilliant Phone

I want one box. I want to use it for pictures, phone calls, email, the web and the odd bit of work: writing, spreadsheets – all that stuff. I want to do it anywhere I go, too.

It’s happening in fits and starts, but it looks like I’m going to get what I want. There are still a few barriers. It’ll take a few years for the industry to figure out how to get me fully portable wireless broadband and there will be a painful period where it foolishly tries to charge me a lot of money for it. People still aren’t comfortable with the idea of converging PCs with true mobile devices either, but ultraportables like the Asus Eee are one third of an evolutionary process. The next third is embodied by the iPhone, and represents smartphones with PC-quality apps and an innovative user interfaces. The final third is 4G: packet-based, high speed wireless communications.

Let’s call the result a “brilliant phone,” though in a decade’s time the word “phone” will be an atavism, since voice won’t be anything special, but just one function out of many. It will do all kinds of cool things, but let’s get back down to earth. We’re a telecom expense management company. What will the brilliant phone’s TEM issues be? Here are some educated guesses:

Data Migration: The brilliant phone will be a consumer’s primary data tool. It will have enough flash memory (or a successor format) to take the place of your laptop, leading to the question of how you’ll move this data around when it’s time to backup or upgrade. Carriers currently encourage users to use expensive internet time to send pictures via email and unless you get a smart data plan, charge you by the megabyte for everything else. This method isn’t sustainable. Besides, in a decade’s time you won’t want to run home to a WLAN every time you want to move a substantial amount of data. Ultimately, carriers will provide a solution – and charge for it, too. It will be our job to get you the best deal on their backup and migration services.

Management and Reporting: Telecom management and reporting services will be as relevant as ever in the age of the brilliant phone. In fact, it will be even more important to track usage since everyone will use multiple functions as a matter of course. The era of voice-only usage, already moribund, will be truly dead and buried. While future cell phone plans will be much more generous with data, user management will transform from a straight savings issue to a matter of productivity. You’ll need to know if staff are using the brilliant phone appropriately.

Telecom and Data Billing Errors: Like death and taxes, carrier billing errors are inescapable. They’ll keep overcharging you and we’ll keep correcting them. The brilliant phone will continuously send and receive data from next-generation networks, so outages will be even more of a problem than they are now. You’ll deserve credit for dealing with them; we’ll make sure you get it.

Beyond North America

North American cellular telecom expense management is the heart of our business. Nevertheless, we keep abreast of trends beyond our primary market. There are compelling reasons for doing so – three “Ps.”

1) Products

One of the simplest reasons is that other markets are testing grounds for phones and devices that could be bound for the North American market. As I mentioned in our last article, the Blackberry Bold rolled out in test markets first – including Chile. You have to do more than just observe whether or not a product is hot in one country or another. Look at the relationship between the product, consumer and infrastructure.

Example: Developing nations’ explosive wireless growth and need for inexpensive handsets is a function of wireless infrastructures being simpler to install, and carriers’ commitments to volume sales that overcome low margins. Lesson: Economy handset fleets should be more attractive in rural areas here, too, especially in businesses that rely on personal mobility (on site technicians, for example). Low land line density for phone and internet makes it easier to get things done through a handset, and while carriers have no motivation to make handsets cheaper here, high market penetration in North America means they have to offer them if they want to compete.

2) Policies

Foreign markets provide an array of “What if?” scenarios that tell us what might happen if policies or government regulations change. Mobile communications is probably the most varied field in telecom. Every market has its own government-mandated quirks and unique carrier policies.You could write (and analysts have written) giant volumes about SIM card policies alone.

Example: In the UK, “box breaking” occurs when a consumer unlocks the SIM cards of phones and resells them at a profit in another market. Carriers dislike the practice, but it’s legal. Lesson: Thanks to box breaking, UK dealers are conservative with subsidies and have begun incorporating various policies to limit the practice, including mandatory minutes and detailed tracking procedures to follow the phone’s status. If unlocking SIM cards becomes a mainstream North American practice, carriers here will have to use the same methods.

3) Penetration

Other markets are an excellent way to look at various penetration levels. Europe and Asia are the primary focus here because they include regions with higher penetration levels than North America. Parts of Europe are saturated to over 100% market because many consumers own more than one active handset.

Example: Some European markets have reached the apex of linear growth, so carriers increasingly emphasize new features and higher-end hardware. Mobile banking and purchases are just the tip of the iceberg; converged multifunction devices will be the rule, and not status symbols. Lesson:Â North American providers will have to follow their European counterparts when it comes to attracting business from people who mostly already own cell phones and need a further inducement to switch carriers.

Eyeballing the Blackberry Bold – How Does it Stack Up Against the iPhone?

We’ve been blogging about the iPhone 3G a lot lately, and for good reason: Everyone working in telecom expense management will have to deal with its rigid plans and arcane activation procedures. But what’s really interesting is how the iPhone woke every other manufacturer up. They all know that people want stylish, high end smartphones now, and that they’ll go to considerable effort to get them.

The iPhone is branded as a smartphone and its features take aim at RIM’s Blackberry, so it’s fitting that RIM’s reacted with a product seemingly designed to attack the iPhone’s niche. It’s called the Blackberry Bold, or 9000 series.

The Bold is currently running in test markets, but a wide release is just around the corner. AT&T in the US and Rogers in Canada have both announced plans to carry it, leading to the big question: Which smartphone will get a better plan? Unfortunately, that’s not something we can reliably answer (yet), but what we can do is look at the 9000’s features and see how they compare to the iPhone’s.

Applications: The iPhone supports lots of snazzy Apple apps. They’re a real joy to use but let’s face it: There are times when you just need to get down to business. The Blackberry Bold lets you edit Word, Excel and Powerpoint documents. The winner? That depends on your agenda, but you’ll probably be more productive with a 9000 gracing your pocket.

Memory: The iPhone wins here, with 8 or 16 GB options. The Blackberry Bold has a respectable 1 GB, but can be expanded to 8 GB.

Media Toys: Both phones synch with iTunes. The Times review notes that the Bold’s screen is just as clear as the iPhone’s. Both of them feature 2 MP cameras, but while the iPhone’s great at organizing photos into nifty albums, we’re not sure if the 9000 will match it. Winner: iPhone, but only due to lack of evidence on the Bold’s part.

Email: The iPhone uses Activesynch technology to regularly request email right from your Exchange server. RIM operates its own network; Blackberries are virtually synonymous with this “push” approach. Although outages are an occasional problem, millions of users are satisfied with it. We’ve also heard anecdootal evidence that it’s just plain faster than iPhone, too. This is Blackberry’s edge; it wins.

Web: Both phones offer true HTML browsing but the iPhone uses Safari: the same browser used by Macs. I feel conflicted here; I know lots of people dig Safari but when I tried it, I was disappointed – but maybe that’s because Firefox is my usual browser, and it’s just so good. I’m withholding judgment here. Both phones are also capable of Wifi.

The iPhone is very, very cool. The Blackberry Bold might be cool, but it has to overcome the brand’s somewhat staid, business-oriented image. That sums up the whole challenge of the “iPhone niche.” This is a crossover market whose customers are looking for a mix of features and style. One thing that might resolve it is the state of this niche a year from now, when the Apple fan effect will fade, and a larger proportion of consumers will decide based on something more than Apple’s formidable brand.

iPhone Madness in Canada!

Well, we got the iPhone in. To use a technical cellular expense management term, it’s getting all crazy in Canada.

Despite my initial skepticism from a telecom expense management perspective it looks like it’s a hit on both the corporate and consumer side of things. Certainly, the iPhone’s capabilities mean the right plan will let it do your Blackberry’s job and give you a bunch of stylish tools, but I was curious to see whether corporate users in particular would tolerate the drawbacks of Rogers’ monopoly. It probably helped that last month, consumer outrage drove Rogers to change its iPhone plans. It looks like the company successfully headed off objections and tapped into the runaway hype.

As you can probably guess, demand is one of the chief issues right now. It’s just plain hard to get an iPhone – estimates put sales at over 90 units per Apple store, per day, leading to chronically low stock. Thanks to our cellular customer service and procurement focus we were able to get them but many others haven’t been so lucky. I have to admit though: Once you see it up close it’s very, very pretty.

Now as I did predict, cellular expense management for the iPhone is tricky business. Rogers has a “one size fits all” philosophy that makes migrating services difficult, though not impossible. You can negotiate plenty of changes if you want to pay $700 per unit, but most customers are in it for the subsidy. If you’re willing to pay for the whole phone though, you can simply add a $30 per month data plan – if you order before August 31st. If you want to pay $199 ($299 for the 16 GB) for the unit you’ll have to get a bundled voice and data plan that costs $60 and up. The bundles include unlimited WiFi access at Fido hotspots, too. When it comes to data usage, that definitely softens the blow.

This is a very general overview of iPhone pricing. The devil really is in the details here, and they include all kinds of fiddly bits around activation, rebates and service migration – but that’s what we do, so we’ll deal with it. The iPhone isn’t the only smartphone game in town by any means, but sure is the most stylish one.

Whither WiMAX?

Two or three years ago we braced for a yet another communications paradigm shift — one that was supposed to take effect now. The mobile WiMAX revolution would have been fascinating for use telecom expense management folks. Maybe it still will be, but despite the tremendous promises of the technology there’s been more fizzle than pop out of it.

WiMAX is designed to provide WiFi data capabilities over large geographical regions. In North America, it’s seen limited market penetration. Here, it mostly replaces the “series of tubes” most of us use, but at the other end a fixed base station relays it all to local devices, making it functionally identical to standard broadband.

This is all well and good if you’re living in the country and need a replacement for the ol’ series of tubes, but for the rest of us, WiMAX’s real potential lies in providing broadband to mobile devices. Mobile WiMAX standards were approved in 2006 and various hardware companies promised to roll out the hardware by this year. So what happened?

In North America, the carriers and manufacturers are stuck in a holding pattern. Even though 3G has started to kick carriers out of being so miserly with data, the fact remains that the economic motives for companies to support WiMAX are murky, because they create consumer expectations of cheap, universal access — something anathema to the old business model for mobile data access. Hardware manufacturers don’t have any desire to churn out devices that won’t get broad support. WiMAX’s spotty commercial record in Canada and Australia definitely hasn’t helped either. Canada’s forerunner Inukshuk network is a traditional last-mile provider and the CEO of Australia’s Buzz Broadband dubbed his own company’s initiative a “miserable failure,” blaming second tier providers and persistent technical issues.

If there’s a viable future for WiMAX, it may be in the hands of Clearwire after it finishes merging with Sprint Nextel’s Xohm. Clearwire is the focus of a joint venture between several major carriers and may represent a positive next step for adopting the technology. From a telecom expense management perspective, this could presage several interesting changes. Strictly metered data fees are dying, but unlimited plans are generally synched to a few exclusive deals. If WiMAX succeeds, it opens the way for a competitive environment where consumers don’t have to track typical data usage — unlimited high speed will be something your phone just does. WiMAX might not be the winning backbone, but the idea’s on the table — and wouldn’t it be cool?

The iPhone Lands Like a Canada Goose — In Canada, That Is

So, it’s in Canada now. After much speculation, wailing and gnashing of teeth, Canadians can finally get their own iPhones. How did things work out for folks north of the 49th Parallel? Let’s look at the Good, the Not So Good, and the Telecom Expense Management Angle.

The Good: Canadians got hardware price parity — the Canadian 8 GB iPhone is $199. Fueled by rising fuel prices and a downturn in US currency, the Canadian dollar has floated at near parity with the US dollar for a while now, but prices have been slow to change in response. Canadians are used to paying more, but by now they shouldn’t really have to. When it comes to buying the iPhone, they enjoy the same discount as American customers. Canadians should hope that this new parity eventually extends to other products and services but they might have some additional hurdles to jump because . . .

The Not So Good:Â . . . while the base prices are at parity, Canadians have to pay more — sometimes a lot more — to use the same features. Originally, Rogers’ announced plans were . . . insane. The cheapest package for Rogers was CAN$60 for 400 megs and it went up, up, up from there. After widespread consumer outrage, Rogers offered a 6 GB plan for CAN$30 instead — for now. If you don’t get an iPhone by August 31st, Rogers will revert to its previous, cringe worthy pricing scheme.

Worse, Rogers doesn’t exactly want you to know that there’s a deal afoot. Go to the iPhone plans page. Notice how you have to scroll down to see the new plan? How the price isn’t mentioned, and you need to click on an additional link to find it? How, in fact, you could miss it completely if you followed the site’s guidance?

Nice going. And remember: If you buy one, you’re on the hook for three years: the longest iPhone plan commitment in the world.

The Telecom Expense Management Angle: You want to save money buying a phone from a monopoly that only offered a decent plan under duress, seems to be hoping you’ll miss the chance, and reserves the right to eliminate it at any time? What could possibly go wrong?

It’s a pity, really. The 3G iPhone is probably the first iteration of the device that has more than hype and sleek design going for it. It has formidable data capabilities and could be a legitimate business tool, but at post-August 31st rates it’ll be more of a status symbol than anything else. Plus, being locked into Rogers means you don’t benefit from carrier competition.

This doesn’t mean there’s nothing we can do for an iPhone user. We can still monitor usage and billing errors to save Canadian iPhone users money. Better yet, if you discount the branding angle, the iPhone does help you indirectly, because other manufacturers are stepping up to the plate with exciting mobile devices aimed squarely at iPhone’s niche. Once they mature, you’ll be able to get a cool equivalent without hooking up with a questionable plan.

A Telecom Auditing Eye for the 3G iPhone Guy

Let’s face it: As it currently stands, Apple’s iPhone gets by on being a stylish status symbol as much as it does on actual features. You can’t beat Apple’s aesthetics or interface design. But behind the hype, the iPhone’s appeal has been limited by its high price and the US’ chaotic business models and wireless network standards, which make some features frustratingly slow or expensive. Even though iPhones are a hot consumer product, few businesses opted for fleets of them. One might sneak into a corporate plan as an executive toy, but that’s about it.

At least, that was before the 3G iPhone was announced, promising twice the capacity at half the up-front price.

The 3G has lots of toys too, but where it gets interesting from the telecom expense management perspective is how it affects a mobile data market that was virtually synonymous with the Blackberry. AT&T promises “business-class” email and data capabilities for iPhone customers. This refers to “push” email technology that maintains a constant connection to facilitate faster updates. As the old .Mac service transforms into MobileMe, clients will benefit from cross-platform, synchronized push services that give you access to up to date email and other info from your computer, phone and anything else in your data “cloud.”

This PDF represents AT&T’s hard sell to business clients. Between the new services, subsidized price drop and the unlimited data plan Apple arranges for iPhone subscribers, it might be time to reconsider the iPhone as a cost effective (if easily distracting, thanks to iTunes and true web browsing) business device. There’s one big catch, though: Exclusivity.

Any telecom audit professional will tell you that inflexibility equals higher expenses. It’s always been a big cellular expense management challenge in SIM-locked North America. The 3G iPhone’s exclusive tie to AT&T in the US (and Rogers in Canada) means that beyond Apple’s demands for an unlimited data package, providers can put a little extra fat on their fees, like the $10/month increase that AT&T seems they’ll be adding to data costs. You might want to hold on to your less-glamorous Blackberries after all.

Cellular Expense Management Lingo

Cell phone plans are complicated for a number of reasons. One is the technology, which isn’t just driven my miniaturization and power, but by a shifting set of global standards that let us talk to each other and determine how we do it. Another reason is that standard telecom company practices aren’t always pretty. Most people don’t know, for instance, that phone companies deliberately hamstring flexible standards that are supposed to help users. If you haven’t read telecom expense management literature, you might not even know if it was possible to switch carriers as easily as SIM technology should allow.

What’s SIM? What else should you know? Here are a bunch of terms that people use in the TEM business.

BAN: Business Account Number

CTN: Cellular Telephone Number

GSM: Short for “Global System for Mobile communications.” This is the most popular international mobile standard.

IMEI: International Mobile Equipment Identity. This is international serial number identifies a mobile device, but not necessarily its user.

IMSI: International Mobile Subscriber Identity. This unique number identifies a GSM network mobile subscriber. The IMSI number is stored on his or her SIM.

LD: Long Distance

OOB: “Out of Bucket.” Minutes used over those allotted by your cell phone plan.

Porting: Moving a phone from one carrier to another. The new carrier must agree to a TOR.

Pre-HUP: Upgrading a phone before being eligible to do so under a cell phone plan. Doing so incurs an additional fee.

Roaming: Receiving cellular services outside of the local area where the phone was registered.

SIM (or SIM Card): Subscriber Identity Module. This is a removable card that contains a user’s subscription information (including ISMI) and personal data. It can be swapped from phone to phone so that a user can easily switch phones. SIM Locking restricts swapping.

SIM Lock: A restriction on some GSM phones that only allows them to accept SIM cards from certain countries or networks. In North America, most new phones on extended plans are SIM Locked.

System Access Fee: A basic administrative cost that all carriers charge, regardless of the phone or service offered.

TOR: Transit of Responsibility, where one carrier agrees to take over another’s service agreement.

Cell Phone Expense Management

Last week I talked about our core telecom auditing process, but I left out one important area: cellular service. Mobile phones are GILL Technologies’ specialty; we handle everything from cellular expense management to procurement. I held off on that topic because I wanted to talk about it in detail — and that’s what I’m doing today.

We use the same three step process (cost audit, expense management plan, customer service presentation) for cell phone plans as we do for other telecommunications items, but a cell phone cost audit includes several unique factors:

Basic Plan Features: I look at basic inbound and outbound charges along with core features like texting and Internet. Modern cellular service plans are feature-heavy — and charge-heavy, too. Service providers present these packages individually, but I use our internal clues to audit them from a global perspective. That way, I can compare the costs per service for various combinations.

Data/Smartphones: Blackberries, 3G Phones and other mobile data devices go beyond the traditional role of the cell phone as a land line analog. I fit the capabilities of different devices and carriers to the client’s needs.

Pooling Cell Phone Plans: I track pooled minutes, down to the minute — something carriers often rely on you not doing. We find pooling plans where clients use their minutes efficiently.

US Roaming Charges: Roaming charges are always important, but they additional complexity in many US states. Roaming plans can cut across a host of carriers, each of which have distinct benefits and drawbacks.

Once I have all the information, it’s time to match it usage trends. Cell phone plans are complicated, but the complexity can be an advantage. Service providers set the standard of counting charges down to the minute. Thanks to that, I can track use patterns with precision. Once I estimate what a company’s needs are I can pick appropriate plans.

In many cases, the ideal solution will change depending on the department or individual, but we know how to manage multiple carriers and plans for our clients. One of the advantages of cell phone expense management is that your company can save money using methods that would be too logistically challenging to implement in-house. The best solution is the easiest — when you get us to take care of it for you.

About the Author: Ted Washburn is a telecom expense management analyst at GILL Technologies.