In your ongoing effort to protect the interests of your organization and minimize any risk or exposure that could result in financial liability, Tangoe recommends specific items you should be on the look out for in a telecommunications agreement.

Where’s the “gotcha” in this scenario? It’s that data pooling is currently available only in very limited cases. Carrier billing systems were not designed and built to address data pooling, only voice pooling. And those data pooling plans that are in existence are not a good fit for the typical enterprise smartphone usage profile. The challenge is that data pooling plans are not offered in practical megabyte-sized buckets. For example, one carrier is currently offering 4MB poolable data plans; most people today consume 10MB plus per month. (And we can expect data usage to continue to increase as device applications drive more bandwidth requirements.) So a 4MB plan is impractical for the typical 10MB user and, in such a case, the 4MB user would get socked with overage costs of about $30 plus per month. Not good.

To minimize risk in your telecom carrier contract, Tangoe recommends that there should be no limits on the percentage your commitment can be reduced (noting that a company has little control of how much of the business was divested) or how many times the protection can be invoked (since it’s not fanciful to think that, for example, an optimization and a divestiture could both occur over a three year term). In addition, the calculation of the reduction should be agreed upon by the parties and not determined solely by the carrier. Here is an example of standard contract language that contains these restrictions:

Mobile (or wireless) rate plan optimizations are a critical function in ensuring that your organization fully leverages its mobile contracts and purchases mobile service at the lowest cost possible. Why is it so critical? Having secured market leading mobile contracts doesn’t guarantee you won’t over pay for mobile service. Market leading rates on pooled or flat rate voice plans are not working to your best advantage if they aren’t deployed properly across your mobile user community. Without periodic optimizations, you will unquestionably lose dollars that can never be recovered, and lots of them. Additionally, the continued proliferation of smartphone devices that consume multiple types of mobile services (voice, data, text messaging, etc.) has only increased the importance and complexity of mobile rate plan optimization.

Before accepting a combined commitment for fixed and mobile services, Tangoe recommends you consider “What’s in it for me.” Fixed service revenue commitments usually have a hard dollar penalty associated with them for shortfalls. If you fall short of your unit or revenue commitment in a typical mobile services agreement, however, the only consequence is that you lose a discount point or two on a going-forward basis. Given that there is a greater risk associated with the hard dollar commitment, it’s logical that the carriers “value” this type of commitment more than the “softer” commitment associated with mobile services.