How Will BYOD Impact Your Carrier Contract?

Sep 10, 2012

CIOUpdate Contributor

by Matt West, director of Telecom Services at NPI

Bring-your-own-device has evolved from trend to the new normal and with that discussions around the risks of implementing a BYOD policy in the enterprise have become intense.

How can enterprises enforce secure remote access to corporate assets? What happens when an employee stores sensitive info on their tablet, then leaves it in a hotel lobby for anyone to see? And, how do we make sense of device and plan reimbursement? For all of its ergonomic and economic advantages, CIOs are still struggling to reconcile risk with reward as they navigate BYOD in their businesses.

There is one risk that’s typically overlooked: the impact of BYOD on the carrier contract. Interestingly, this issue hasn’t gotten much play. At face value, it would seem that more individual responsible users (IRUs, as carriers call them) would mean less worry, less cost and less contract complexity for the enterprise.

But is that actually true? The answer is no.

While the end game may be to shrink (even eradicate) the enterprise carrier agreement, we’re far from reaching that goal. The implementation of BYOD and the transition of corporate responsible users (CRUs) to IRUs can negatively impact your carrier contract and negotiation leverage. With that in mind, CIOs should consider the following as they explore and evolve their BYOD strategy:

Respect your carrier contract. It’s not going away any time soon. Most enterprises deploy a hybrid variation of BYOD that include both corporate and individual users. This has made carrier contracting and contract management more complex, requiring a deeper insight into who’s using what device, how and how much.

It’s imperative that companies keep an accurate inventory of their telecom assets even as these numbers change on the path to BYOD. Know how many smart phones, voice phones, tablets and other devices are being used in the enterprise, and what the usage is per line (minutes, text messages, etc.). Without this knowledge, you can’t negotiate better discounts and incentives with your carrier.

BYOD doesn’t mean you have to give up your volume discounts. Just because you support a BYOD policy doesn’t mean you can’t get credit for IRUs under your current carrier contract. It’s possible to still receive discounts for IRUs by requesting they use the corporate rate plan. Think of it like a “tell a friend” retail program where you get a discount for every customer that names you as the referral source. If you can get large numbers of IRUs to use your carrier/plan, you may get even bigger benefits in the way of credits to your corporate account.

Be cautious of early termination fees. If you’re migrating large volumes of CRUs to IRUs, be sure to investigate the ramifications of your timing. Most carriers go to great lengths to make it difficult to terminate service. One of these measures is an early termination fee. Most carrier contracts specify early termination fees to protect themselves against abrupt terminations (especially when they involve large quantities of users). Some enterprises may be able to absorb the penalty, but others may not. The wrong timing can deal a hefty blow to telecom budgets.

Carriers are new at this, too. Carriers and enterprises alike are figuring out how to navigate the tactical and strategic implications of BYOD. This environment of uncertainty exacerbates the lack of transparency around pricing and terms within the wireless provider industry. Carriers are heavily motivated to protect the revenues they garner from large enterprise accounts, and this often comes in the form of hidden fees, unnecessary charges and less-than-fair pricing and discounts. It’s more important than ever before to benchmark carrier pricing and discounts to minimize disparity and eliminate overspending.

BYOD will have an impact on every facet of telecom expense management, starting with the way carriers’ services are sourced and contracted. Mitigating this risk early on will give CIOs a leg up in getting the greatest cost and productivity benefits that BYOD can deliver.

Matt West leads NPI’s telecom spend management practice, where he helps enterprises reduce, optimize and manage their wireless and wireline spending. He has more than 25 years of experience in the global telecommunications industry having worked for providers like Deutsche Telekom, Verizon and Tata Communications.

Tags: BYOD,

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