CIO — Thanks to a Federal Communications Commission mandate, wireless carriers are about to lose one of the biggest bargaining chips they have over their corporate customers?number portability.
Business users have been reluctant to switch carriers because getting better service or a better rate wasn’t worth the hassle of getting a new phone number, says Joe Basili, vice president of marketing for Teldata Control, a company that helps large businesses manage their telecom expenses. The new rules, which will allow users to switch carriers and keep their phone numbers, go into effect Nov. 24.
Basili says this is good news for IT executives because they may now be able to squeeze better volume discounts from carriers. This will make it much easier to move all of their users to one service, though the process may take two or three years to complete. "This is a chance for enterprises to get their arms around cell phones and manage them like other network services," Basili says.
Companies such as MSS Group, RFD Systems and Teldata are part of a growing segment of business process outsourcing called telecom expense management. According to a preliminary forecast by Gartner, the telecom expense management market will reach $500 million by the end of 2003, on its way to $2.5 billion in 2007.
Eric Goodness, an analyst for Gartner’s Dataquest IT services group, says telecom expenses consistently rank among the top five IT expenditures because of decentralized cost control and the complexity of telecom billing. Outsourcing telecom management is one way companies can better detect billing errors (which typically result in 10 percent to 15 percent in overcharges, according to Gartner) and collect data to renegotiate their deals when appropriate.
"It’s all about savings," Goodness says. "Having good visibility into your contracts is great, but if you’re not saving money, who cares?"
