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July 11, 2002 9:54 AM CDT

How to Avoid the Five Costliest Mistakes Companies Make With Cellular Phones


Deciphering your company's monthly cellular phone bill is about as easy as understanding the theory of relativity.
Deciphering your company's monthly cellular phone bill is about as easy as understanding the theory of relativity.

Deciphering your company's monthly cellular phone bill is about as easy as understanding the theory of relativity. The task is so daunting, many controllers and telecommunications managers are tempted to toss it aside in frustration. Month after month, companies throw away hundreds or even thousands of dollars on their cell phones while they struggle to cut costs in every other area of operations.

Cellular and wireless services are quickly becoming a large business expense. In an average year, U.S. businesses spend a total of more than $22 billion on pagers, cellular telephones and other wireless communication devices. Cellular phone costs especially are not managed effectively. Companies unwittingly overpay for cellular service because of outdated and inappropriate calling plans and a lack of time and expertise to deal with the complexities of the problems.

Outsourcing cellular phone management is an option for companies with more than 50 cellular phones. The service is joining the ranks of payroll, insurance auditing and human resources as outsource alternatives for the same reasons: there is a need to keep up with the rapidly changing knowledge base and outsourcing provides convenience along with bottom-line cost savings. Outside cellular management companies can analyze cellular usage, uncover billing discrepancies, stay abreast of new options, and maintain a cost-effective monthly service. Unbiased third-party experts help companies maneuver through the mine-fields of service options, numerous calling plans, and complicated and coded billing statements. For companies, not only does the service bring focus and specific knowledge to the task but it also allows a controller's valuable time to be applied to core competencies.

Third-party cellular management companies find that the following five mistakes are the most common errors companies make with their cellular service

1. Conducting business with numerous cellular phones as they did when they only had a few.
Cellular usage at many businesses has grown helter-skelter by adding phones one-by-one over time and on multiple consumer, rather than business, plans. Avoid being enticed by special offers and promotions from cellular service companies. Cellular service providers routinely advertise special offers and promotions as incentives, but these programs can be restrictive and may not be the best deals available — or worse, they may have hidden long-term costs.

2. Letting employees select their own cell phones and service plans.
Many businesses reimburse employees for cell phones based on service plans selected by the employee. Likely, they are paying consumer rates for their cellular service and the company loses out on certain discounts only given to businesses. Consolidating cellular service with the same provider can save time and money while providing additional benefits, such as free mobile-to-mobile airtime. If all employees have the same type of phones, accessories can be purchased in bulk at a discount to be kept on hand for use as needed.

3. Changing cellular service providers as a solution.
Changing cell phone service providers does not necessarily guarantee the best deal. Sometimes changing providers creates new problems such as the need for new cell phone numbers and business cards, trying to learn a whole new set of billing rules and incurring additional or hidden costs. When new cellular service is based on the old service plans, it likely will yield only negligible savings. Often, it's more economical to fix the service with the current provider if a company has a centralized cellular program. If a company has a decentralized cellular program, it needs to consolidate its plans under one or two providers to realize any savings.

4. Trusting your cellular phone management to your provider.
While cellular service providers may tout their ability to manage their customer's accounts, they are more interested in their profits than in saving customers money. An outside, impartial cellular management company can assess cellular programs and make recommendations that may include switching to another cellular provider with a better deal or, more often, help lower costs by negotiating with the current provider.

5. Trying to manage your cellular program yourself.
Very few companies have the time or expertise to understand their cellular phone program. Most companies are continually losing money on their cellular bills and wasting valuable staff time at the expense of the company's core business activities. Outsourcing the company's cellular phone management can have a noticeable impact on a company's bottom line by reducing operating costs and increasing profits.

Just as with cellular phone providers, be sure to check for a reputable cellular phone management company. The firm should be able to determine the condition of a cellular program by reviewing at least one month's cellular bill or bills. After completing the review, the firm should be able to show how much money it can save your company and how it can increase your company's cellular phone efficiency. Also, the firm should be capable of presenting ongoing management programs tailored to your specific needs.

Cellular management firms may offer their services on a contingency basis, at a flat fee, or a combination of both. Some management companies take a percentage of money saved off the old cellular bills for the first couple of months of the contract, then set a flat fee for monthly management programs. Be sure to ask for the terms and fees to project savings in real costs as well as staff time.

Outsourcing a company's cellular phone management can prove to be a major time and cost saving decision. It can become a routine function for many organizations that rely on cellular technology for their business and for their profits.

About the Author

Author Paul Jennings, CEO and founder of Public Communications Services, is recognized as a leader in the telecommunications industry. The company has launched Cellular Management Services, a new cellular telephone management service for companies with greater than 50 cell phones that want to achieve the most cost effective and efficient use of their phones. For more information, visit


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