Customers buffeted by wireless pricing complexity

Complex wireless service prices, combined with complicated data and voice plan choices and confused users have given rise to a new business opportunity - figuring out how much an enterprise spends on wireless and letting that company know if it can be reduced. No wonder John Tyl, president of Smart Thought Technologies Inc., sounds as though he's smiling when you chat with him on the phone. "Every year we've been doubling our revenue," he says of the three-year-old firm. Smart Thought is a consulting house that helps businesses understand how much they spend on wireless, with an eye to helping customers whittle the costs down. "The clients have multiple carriers, multiple accounts, multiple rate plans," Tyl explains. "It's a very difficult environment for them to get control of."It's a good situation for Smart Thought. But it indicates just how complicated the wireless business is for both customers and service providers. New products and pricing plans are being introduced at an alarming rapid pace as carriers try to attract the most customers possible. Handsets seem to flood onto the market daily - especially at this time of year, as the vaunted Consumer Electronics Show (CES) just wrapped up, and device makers begin peddling their latest and greatest. Meanwhile, carriers wrapped in competition roll out novel packages, faster networks and fresh services in their ever-present attempts to best each other. This may well result in better products. But it also causes confusion. Consumers and enterprise buyers don't have the information to make such decisions. They don't know what plan makes the most sense and what handsets are appropriate. Companies are also faced with either buying the same service for all employees or tailoring service packages based on employee responsibility. Some wonder if this is the inevitable outcome of a modern mobile sector. "I think to a large degree it is," says Ian Angus, one of the principal analysts at Angus TeleManagement Group Inc. in Kemptville ON. "It's certainly accelerated by the fact that despite promises and promises, none of the big carriers have shown any real interest in dealing with it." In Angus' estimation, the likes of Bell Mobility, Telus Corp. and Rogers Wireless spend more time marketing new products than helping customers through the complexities. It's not as if the service providers necessarily want to make life difficult for their clients. It's just that the cards are stacked against any carrier that tries to simplify. "The company that did try to do that was Fido: they came in with per-second billing. It was supposed to be clean and simple. They did shake up the market for a while. But they're gone," he says, referencing Rogers' acquisition of Fido in 2004. Although Fido still exists by name, many industry observers argue that it's a shell of its former independent self. "You can talk about it all you want, but the moment Bell or Rogers drop their prices to a penny a minute and offer a special deal if you happen to live north of Churchill and only make calls on alternate Tuesdays, somebody else is going to want another more complex plan. And most of these companies are reasonably decentralized. At the very least they work in provincial markets, and often smaller units than that, for planning prices. They have to go with what's happening locally," says Angus. Heaven help any carrier that tries to beat a different path. "An announcement, ‘I'm going to simplify' is largely an announcement that ‘I'm going to lose market share,'" he says. In that light, perhaps it's no surprise that wireless carriers have been doing as they have lately, trying to impress customers with sophistication instead of simplicity. Consider Bell's new downtown Toronto store. It provides not just the newest handsets and wireless features, but it also offers advice from the carrier's mobile experts on integrating and leveraging wireless in a business environment. "We are not just offering a new store, but a new level of service," said Neeraj Sharma, Bell's VP, corporate stores, in a press release.According to Jim Jaques, senior VP of Bell Mobility, the wireless provider's greatest asset in the battle against complexity is the personal touch. "The solution always comes back to the service representative, whether it's face-to-face or over the phone," he tells Report on Wireless in an interview. "We believe the customer knows that their best source of information is to call us." Bell isn't the only carrier making changes. In Burnaby, Telus has rolled its mobile arm into its corporate core, so ostensibly operations that the landline side performs well - treating business customers as unique from consumers, for instance - will be adopted by the wireless side. Rogers raised the broadband bar in November, unveiling its High Speed Downlink Packet Access (HSDPA) network in the Golden Horseshoe area of southern Ontario. And in December the carrier cross-pollinated Research In Motion Ltd. (RIM) and Nokia Corp. via BlackBerry Connect, a service that brings the back-end functions of RIM's popular BlackBerry to Nokia's E62 handset. Now users who like BlackBerry functionality have another end-point option. But none of these developments inherently simplifies. And it's unclear if they are in line with what users want. Report on Wireless sought opinions from a handful of IT and telecom managers in charge of wireless at their companies: what can carriers do to improve? Promised anonymity, they said:"One of the biggest issues we have is the reporting. We deal with all carriers and have a real problem getting billing and inventory information electronically and in a consistent format." "From time to time Celco A has a fantastic special on a new whizbang cell phone that plays music, takes photos and irons your pants. If you currently use Celco B, no problem. You switch over to Celco A and you are rewarded with this new phone. However, if you have been a loyal Celco A customer, no way Jose, you are not entitled to that new phone. Ironic, no, that you get punished for loyalty?" "Landline billing and mobility billing don't have the same bill period, so it's difficult to align both of them....Plus the payment periods are different. We have less than 30 days to pay our mobility bills and exactly 30 days with our landline." The folks at Smart Thought may just keep smiling. Their business is based on the kind of complexity apparently born not of scheming, but of the industry's natural flux. "I'm not sure if that's a conscious decision on part, but our clients are saying it is complicated, and it takes a good chunk of time to work through it," Tyl says. Jaques at Bell, however, worries that companies such as Smart Thought could lower the value of wireless. "This incredible asset, wireless connectivity right across North America...is one of the most important business tools today. The fear I have is an uninformed, price-based conversation limits a business's ability to take advantage of this tremendous asset to empower their workforce."

Customers buffeted by wireless pricing complexity

News | January 26, 2007

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