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19th November 2003 - New international research reveals
how enterprises are missing out on major cost savings
of as much as 25% in some cases by not moving more or
all of their voice traffic from fixed-to-mobile telephones.
The results counter conventional wisdom that mobile
communications are always more expensive than fixed
phones. In fact it outlines how increasing the proportion
of mobile phones can in many cases result in lower costs
because of changes in call patterns, operational and
capital expenditure.
Conducted by BearingPoint, one of the world's largest
business consulting practices, in cooperation with Nokia
Networks, the study examined factors for and against
fixed-to-mobile substitution, and whether major enterprise
telecom decision-makers in France, Spain, Germany, Finland,
Sweden and the USA are aware of the concept and its
benefits.
The research concludes that mobile service providers
are now in a stronger position to seize more enterprise
voice traffic market share from fixed telecom providers
through negotiating per-minute tariffs with enterprise
customers that are both profitable and can produce cost
savings of up to 25 percent.
Despite the large-scale use of mobiles within business,
the analysis revealed enterprises typically decide upon
the proportion of mobiles to fixed phones based on employee
need and with no consideration about cost savings. None
of the enterprises interviewed had processes in place
to systematically minimise total telephony costs based
on all the factors involved. Although awareness of the
cost saving opportunities of fixed-to-mobile substitution
was low, a substantial majority of the decision-makers
interviewed said that they would welcome further investigation
into how the concept could be applied.
"Determining the total cost of telephony within the
enterprise is a complex issue. This study gets right
inside what the variables and barriers are. It reveals
that few if any enterprises have an in-depth understanding
of how they could optimise costs between their fixed
and mobile phone usage," says Mikko J. Salminen, Director,
Fixed to Mobile Substitution Program, Nokia Networks.
"What is striking is that the opportunity to reduce
costs through moving more voice traffic to mobiles is
available and offers a multi-billion Euro cost saving
opportunity to enterprises globally under the right
conditions," he adds.
One side of the research project examined the right
conditions for successfully migrating from fixed to
mobile within the enterprise, whilst also acknowledging
how telephony costs today comprise many more different
interconnected factors. The key finding is that with
most enterprises having both fixed and mobile telephones,
the volume of inter-network traffic is often unnecessarily
high and therefore expensive. In many cases, increasing
the proportion of mobile phones results in lower costs
because increased mobile charges are more than offset
by decreased inter-network call charges among other
benefits.
Other preconceptions on costs were also reconsidered.
Whilst fixed-to-fixed internal calls are often free
of charge, the associated infrastructure is costly to
maintain. The actual volume of fixed to fixed traffic
also is smaller than thought, as employees are increasingly
making internal calls to colleagues' mobiles because
this is a far more effective way to reach them. In addition,
as many employees have both fixed and mobile company
phones, there are obvious opportunities to abolish duplicated
infrastructure and costs. This includes removing the
costs associated with diverting calls from desk phones
to mobiles, for example.
In its market research programme Bearing Point interviewed
senior decision-makers in the IT/telecom departments
of European and American enterprises about how they
managed telephony costs and their awareness of how fixed
and mobile telephony costs could be optimised more efficiently.
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