By Wayne DeCesaris, Vice President of Managed Solutions, Tangoe, Inc.

The latest offering of the national wireless suppliers (Sprint, Verizon, AT&T, and T-Mobile) to gain or hold market share is the flat rate “all you can use” rate plan. 

The concept behind each provider’s offering is fairly simplistic: for about $100 per month, the wireless user is entitled to unlimited domestic voice usage, with no domestic roaming or domestic long distance charges to worry about. In other words, talk domestically on your mobile phone for as many minutes as you’d like and pay $99.99 per month.

Unlimited minute plans have only been tested (by Sprint) in limited areas of the country, so bringing this concept to market nationwide, across all four carriers is, in and of itself, a significant event.

On the surface, this new class of rate plans appears attractive, especially to the enterprise trying to manage thousands of devices and who have been conditioned to over-buy minutes in order to prevent paying overage charges (usually billed at around $.25 per minute). However, closer inspection reveals that these plans are cost effective to only a narrow range of users—the high-end user.  In order to get to an aggregate rate of $.06 per minute (often considered the holy grail within the enterprise community) using these plans, a user would need to consume close to 1,700 minutes per month.

Further, since many of the more competitive plans offered to the enterprise (such as shared minute or pooled plans) often include numerous classes of “free minutes” or “Included in Plan” minutes, it is likely that even more minutes would be need to be used.   In our experience managing nearly three-quarter of a million wireless devices for corporate America, Tangoe sees usage patterns where almost half the minutes consumed by an enterprise are the “Included in Plan” type—primarily “Nights and Weekend” or “Mobile to Mobile” minutes.  Taking this into account, the more likely number of minutes of use required to attain a cost per minute of $.06 is 3,500 minutes per month, per user, in order to get actual billed usage of 1,700 minutes.

Sprint’s flat rate offer is priced in the same $100 range, but they’ve upped the ante (so to speak) by including additional services like their Direct Connect or “Push to Talk” service, text messaging, and data services in the price. This is a little more attractive to corporate America since it offers unlimited voice, text messaging, and data for the same $99.99. However, Sprint has excluded devices such as Blackberry’s and Treo’s from access to these plans. Since this class of PDA device is the primary device used to consume data in the enterprise, the exclusion of PDA’s puts Sprint’s offer in the same relative class as the offers from Verizon, ATT, and T-Mobile with only slightly incremental benefits.

In fact, each of the plans differ when it comes to unlimited text options or data/email capabilities to a smart device (i.e.BlackBerry or Windows mobile) and some have added limitations to their offerings. Current cost comparisons on unlimited voice and email for smart devices averages between $119 (Sprint) and $149 (AT&T).

It appears from the marketing campaigns of these wireless providers that the Flat Rate plans will be promoted as a way to simplify the management of rate plans in the corporate enterprise. Given the incredible savings that can be attained thru effective optimization using Shared Rate plans, which have been a staple of the wireless provider’s offering to the enterprise for the past five years, this new class of rate plans and the ensuing price wars become little more than another tool to be used to reduce costs for a narrow target of users rather than a panacea leading to simplistic reduction of wireless usage costs.

Of the devices and usage patterns Tangoe manages, we see an average spend for voice devices of $45 to $55 per month per subscriber.  When using PDAs, the average monthly cost for voice and data rises to about $80 to $95 per month, per subscriber. The mobile providers are betting that enterprise telecom procurement teams will accept a 40 percent increase in spend in order to simplify rate plan management. That trend will struggle to prevail in the enterprise when management platforms are available at costs starting under $3.00 per subscriber per month.

Enterprise customers may find the flat rate plans a cost effective solution to isolate corporate “pool busters”; power users who regularly exceed the limitations of a pooled plan can be pulled out of plan and managed through flat rate programs.  Tangoe has found that this narrow band of usage patterns effects about 3 percent of the users Tangoe manages.

So despite the hype, until these flat rate plans drop to an affordable, all-inclusive (unlimited voice, text, data) price, they will remain just another option on the regular menu of services available to enterprise customers.

To find out more about Tangoe's mobile rate management services, email This e-mail address is being protected from spam bots, you need JavaScript enabled to view it