Businesses often overlook their voice and data services. Our company provides cell phones to key employees. After examining the bills, we realized that the plans were a money pit. We ended up saving more than 35% by simply changing plans with our service provider. Now multiply these savings for a company that’s using international or overseas calls and you realize how much money they can save. I’ve heard of companies paying $4.65 a minute for overseas calls, and up to $.18 per minute, plus a $.90 connection fee for domestic calls.
Examples such as these are commonplace. When you include the cost of phone lines, cellular services, pagers, toll-free lines, fax lines, and data communications, telecom expenses rank among a company’s top four or five expenses. If you take the total amount spent on these items and divide by the number of employees, it’ll have doubled since 1996.
According to Aberdeen group, a Boston-based research and consulting firm, at a time when rates for some telecom services such as long distance and wireless have actually dropped by 30%-50%, one study shows that 40% of CEOs don’t have a clue about what their voice and data services actually cost.
Why have CEOs detached themselves from this expense? For many businesses, it was the comfort of a strong economy. Everyone was focusing on growth rather than cutting costs. They viewed telecom expenses as simply a cost of doing business. The hard market has changed this attitude.
One area you might want to review is unused phone lines. Let’s say you’re changing locations. You order service for a new location and request disconnects for the old location, but it never gets disconnected. Or you transfer employees without disconnecting their telecom service. Bottom line: the meter is still running in these cases.
Other overlooked billing items include call-waiting service on fax lines, voicemail boxes for past employees, and T1 lines left on from previous tenants. A T1 line that’s live from a previous tenant can cost you $500-$600 per month.
Here are some ideas that might help you cut costs:
Go generic. Issue prepaid phone cards to employees who travel overseas. These can decrease costs to as little as $.07 per minute. In some cases, you might be able to cut a deal that can lower the cost of domestic calls to $.3.5 cents a minute.
Go flat. If you use teleconferencing frequently, ask for a flat rate of $200.00 per month. Or ask for a fixed reimbursement plan for your employees’ cell phone usage.
Cut the cord. Asking your telecom provider to provide your employees with a cell phone at a fixed rate of $50.00 per month. If you instruct all participating employees to use cell phones for long distance, the savings can be enormous.
I hope you take the time to evaluate your telecom bills and save some cash. If your underwriting has become tougher to insure more profitable business so should the underwriting of your internal expenses.