Cellphone supply market dynamics about to change

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Benchmarking data for cellphones shows that the charging model for corporate clients has changed little  in recent years and that by and large most corporate buyers still get a basic discount off the standard rates for subscriptions and call charges.  Alan Low of benchmarking provider Purchasing Index tells SmartProcurement that this is all about to change..

He said that in the past many companies have opted for the corporate rates packages which offer a standard rate per user.

"Looking at the financial results of MTN and Vodacom, it is obvious that both companies make very handsome profits. Greater competition with the advent of Cell C and Virgin has failed to reduce rates substantially and, until saturation occurs, PI believes that there is little likelihood of a price war between the current suppliers."

"In many cases where staff have opted for different packages companies have varying methods of ensuring that they pay for business call only. These range from asking each employee to highlight business calls and submit an expense claim to complex and administratively expensive systems to deduct personal phone costs from their salaries. PI has seen instances where the corporate administration cost and effort is a significant percentage of the total cellphone charge."

"One of the technologies that could dramatically affect the current market is the advent of Wi-Fi. Below is an advert from a UK on-line phone catalogue offering a Wi-Fi phone with built-in Skype (software aimed at allowing users to make calls over the internet at no or very little cost)."

"The Belkin Wi-Fi Phone for Skype works anywhere in the world through your secured or open access to a Wi-Fi network--without a computer. Any home, office, cafe, or municipal wireless access point that does not require browser-based authentication will do.
Pre-loaded with Skype software, the Belkin Wi-Fi Phone features the Skype interface, so it's ready for use with any wireless network"

"The potential benefits of employing this technology could be enormous. Setting up Wi-Fi infrastructure in corporate offices would allow users to use Wi-Fi phones for both traditional landline and cellphone calls, as well as person to person video conferencing through PCs, etc. This year will see new service providers competing in offering Broadband to corporate users, removing Telkom's monopoly. Potential benefits from the above include:

  • One phone for all calls
  • Lower charges for calls and the provision of broadband services
  • Improved productivity through personalised video conferencing
  • Lower administration costs"

"PI recommends that procurement professionals need to assist IT and Communications personnel to develop an ongoing strategy for the assessment and introduction of this new communications opportunity."

Alan Low can be contacted on 084 890 0005

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