Is the Cost of Unlimited Voice and Text too High?

 With the boundaries of new AT&T Mobile Share and Verizon Share Everything pool offerings defined by data limitations (30GB, 40GB, 50GB), one may erroneously conclude these new plans aren’t well suited for older basic phones. Additionally, since these plans include unlimited voice and text it raises the question as to whether you are paying for capability you might only use on a limited number of voice devices. These new pooling options, which we call ‘puddles’ due to their cap maximum of 25 devices, are well suited to SmartPhone devices because the average data usage of these devices is typically under 2GBs fitting easily into 50GB for 25 devices group share environments. One might ask if the price is right for the voice component of SmartPhones and whether it makes any sense for non-data voice devices at all.  It turns out there are 3 general factors that influence whether you will see savings or not by shifting from classic voice pooling to new group share puddles.

Most business mobility management strategies today include voice pooling as the lowest cost approach to managing voice devices.  As with the data pooling described in last week’s tip, one factor that does determine the savings cutover point is the carrier discount percentage.  Because the line access charge for each group share device is not discounted but typically your voice and data access plans in classic pooling are, you will find that savings are greatest with group share at the lowest discount rates and become marginalized at higher discount rates.   The second factor influencing group share savings is the ratio of your company’s deployment of basic phones to SmartPhones.  Once SmartPhones have become the majority of your deployed devices, the savings start to shift dramatically to group share configurations as indicated in the chart below independent of discount.

The final factor influencing whether you will experience savings or not is the price point you are able to achieve through your existing voice pool optimization.  The chart above was constructed with an assumption of a monthly list-price cost of $42.50 per device for both voice and text.  This represents what you might typically be paying for a pool averaging less than 250 minutes/month with a mix of text plans.   The cost of a non-data voice device in group share configurations is $30. It would seem obvious that $30 for unlimited voice and text would always win versus a $42.50 list price but phones need to bear some cost burden of the unused data in a puddle to accurately compare cost alternatives.  The chart above does make some assumptions so your ‘mileage will vary’ but it does provide some general guidelines that will hold true.  Namely that lower discounted situations with higher concentrations of SmartPhones will bring you the largest savings in group share configurations.   This chart characterizes savings benefits you might see with Group Share ‘puddles’ based on your ratio of basic phones to SmartPhones.

Finding the Cutover Point for Data Cards

Both AT&T and Verizon have been aggressively pushing their latest Group Share plan configurations to both consumers and small businesses.  AT&T’s Mobile Share and Verizon’s Share Everything pooled data offerings, which we call ‘puddles’, are limited in the number of devices permitted in a pool to a maximum of 25.  This limitation can produce management headaches for companies with hundreds or thousands of devices.  Particularly challenging is the fact that for Verizon each ‘puddle’ must be on its own billing account number.  The other limitation for large companies is that the offered Group Share choices only span a limited data range from 30GB to 50GB thus forcing companies to carefully assemble the devices to be combined in any given Group Share puddle. The price points of these Group Share offerings are quite attractive and will typically generate eye-catching savings when compared to Classic Data Sharing scenarios (pools built from 2GB and 5GB share plans with no device count or GB limitations).  However, the beneficial economics can quickly break down where a lack of persistent maintenance can result in deteriorating, inconsistent and only partially populated pools over time.

The criteria leading to a selection of Group Share configurations is multifaceted. Over the next few weeks we will attempt to deconstruct some of this complexity into smaller more bounded choice points.  There are two flavors of Group Share offerings by the carriers, Data Only Group Share and a more expensive form of Group Share including unlimited voice and text. This week we begin with the choice of using Data Only Group Share configurations versus Classic Data Pooling.

Aside from the complex management decision to break all your data cards into 25 device max puddles, there are two other factors that should influence a decision to move from Classic Data Pooling to Group Share environments.  In this tip we are looking only at data cards and the cutover point to consider Data Only Group Share without the voice component.  The single biggest determinant will be your average GB usage across all the intended pooled data devices.  If your average usage is less than 2.0 GBs it is a straightforward decision.  You will always save money in Group Share puddles.  Once your average data usage reaches 2.5 to 3 GBs you fall into a band where your vendor discount can impact the decision. Discount becomes a factor in the choice of data pooling because Classic Data Card plans are typically discounted while the access charge for Group Share ($20 for data cards) is not discounted. A higher discount drives the cutover point for Group Share to a lower average usage level.  If you have a small carrier discount, your cutover point will shift to over 3.0 GB average versus a discount of 20% where it makes sense to move to Group Share in a lower range of 2.0 to 2.5 average GB usage.

Utilizing Moving Average May Be Good Enough

In last week’s tip we suggested that some data overage charges can actually be a good practice.  This week we introduce a low effort approach for setting your data pooling levels.  This approach can deliver results that are effective yet don’t require sophisticated forecasting methodologies.  It is not uncommon to find some data pooling environments where you have no latitude to moderate your pool buffers – where your average pool usage falls well below the minimum attainable pool levels. Unfortunately in those cases you will always be paying for data you don’t need or use.  Many, however, are going to find a mix of 2 and 5 GB level devices where your average usage fluctuates in a range yielding options for adjusting pool levels to lower costs by minimizing overage charges and payments for unused data.  While MobilSense employs some sophisticated forecasting methods for both voice and data pools, when it comes to data pooling, using a simple moving average approach to setting pool levels may be good enough and is often better than setting your pool at a flat level year round based on the highest month’s peak usage.

Last week’s tip described a minimum effort approach of setting a flat pool level based on the expectation of incurring some month’s overage. Since data usage can be unpredictable, setting a flat level can lead to growing data overage charges particularly when overall data usage is rising over time and not just experiencing cyclical peaks and valleys.  This week’s tip of using moving averages to set monthly pool levels introduces a low effort but more responsive approach to setting data pool levels.

This chart shows a situation where the average data usage per device is fluctuating between 2.4 GBs and 2.8 GBs.  The perfect fit (green line) represents a result you will never achieve but reflects the absolute best you could ever do, matching your usage exactly.  This chart represents a data pool of close to 1000 devices.  The perfect fit cost for this pool would average $34,900/month.  By contrast, the Moving Average (red line) results in an average monthly cost only slightly higher at $35,900/month.  Through a simple monthly calculation, in this case moving average, this scenario comes within $1k/month of the theoretical minimum monthly cost.

Clearly defining a moving average formula is most easily done when you have a history of usage to draw upon.  The pattern charted above reflects a quarterly rise and fall thus lending itself to a 3 month moving average, which is what was employed in this case.  The number of months used in your averaging calculation should attempt to match the period of the peaks and valleys.  For the chart above, the average usage for the period May through July determines the pool level that will be set for the August billing cycle, and then June through August determines September and the pattern continues.  For the example above, a simple monthly calculation was used to set the subsequent month’s pool level while keeping the cost close to the theoretical minimum.