Optimization Tip #2: How to Construct a Minimum Cost Voice Pool
Of the major US wireless carriers, AT&T, Verizon and Sprint primarily incorporate a building block approach to constructing voice pools – a methodology that provides flexibility for pool resizing. Each plan contributes a small, fixed number of minutes towards the pool (200, 450, 900, etc.). On the other hand, T-Mobile utilizes single bulk minute values per pool (5,000, 10,000, etc.) with devices all included on zero minute add-on plans. This lends itself to less granular tuning of pool buffers.
Whether motivated by simplicity or by choosing an ‘everyone is equal’ cost allocation methodology, we most frequently find pools are comprised of a single standard minute tier – most commonly 450 minutes. Our experience is that companies with greater than 1000 devices typically average between 200 – 400 minutes/devices. The larger the device count the more likely the average migrates downwards towards 300 minutes/device or below. If you are lucky enough to have an AT&T or Sprint Business Essential Add On plan, you will have the most flexibility when reducing your pool size. Verizon and Sprint’s current pool families commonly provide 200 minute plans at the low end. All carriers offer larger minute options of 2000, 4000 or even 6000 and the more you can incorporate these high minute plans, the lower your total pool cost.
To illustrate the savings opportunity of incorporating high minute plans let’s look at scenarios where we have 3000 devices with an average usage of 375 minutes/device and a 20% buffer. We will do our calculations based on list price but the same economics will apply under your specific discounted rates.
In the table above all plan combinations end up with the same total number of pool minutes, 1,350,000. A 5% monthly savings can be generated by building your pool with a combination of high minute plans balanced with the lowest minute plan offered versus choosing to place everyone on the same plan. Using this approach of mixing plans may steer you towards a strategy we commonly use of pro-rating pool access charges based on pool minutes used.
Optimization Tip #1: Afraid of voice overages? Avoiding them can be expensive!
It is much more common that we encounter companies running their voice pool buffers too high than too low. Since the cost of overshooting a voice pool can be expensive, most wireless administrators aim for safer than needed buffer levels motivated by their fear of overage charges. However, your smartest strategy is one that aims to experience an occasional overage bump. The cost of carrying too many minutes in your voice pool means the carrier profits from your underutilization. A rule of thumb is that for every 10% excess buffer you carry it will increase your voice pool costs by 4%. If you are carrying a typical 50% buffer, you are paying 20% more on those voice minutes than you should. Most strategies, including those advocated by carriers, are formulated by identifying seasonal high water marks, then adding a small buffer and running on autopilot at that level throughout the year. While this may represent a low effort tactic it is not the lowest cost approach.
Sizing your pool buffer is a bit of an art but it is a mistake to avoid overage at all cost. The chart below shows actual usage data for a typical fluctuating usage pattern of 4,000 voice devices. There are three cases displayed that reflect three different pool buffer strategies. The lowest cost answer may not be the case you would intuitively select.
It turns out that Case 1 above is the most expensive annual scenario. The Case 1 overage strategy yields overpayments in every month of the year. It turns out in this example averaging roughly 1M pool minutes a month, both Case 2 and 3 are less costly than Case 1. Even Case 3 with a couple of annual overage months is less expensive than Case 1 by $16,173 annually. Case 2, the best choice, is $22,994 less expensive than Case 1. A smart buffering strategy as demonstrated here can save 15% or more annually on the voice access fee costs.
MobilSense Selected a Second Time by CIO Review Magazine!
MobilSense was included in the CIO Review Magazines CR Tech20 2013 Most Promising Mobility Companies in May 2013. We were again selected by the CIO Review Magazine in their 20 Most Promising Mobility Solution Providers award published in the February 2014 issue. The choice was made by a panel of CIOs, Analysts, VC’s and the CIO Editorial Board. This list of 20 companies is those they determined are poised to have a real impact on the exploding Mobility marketplace. MobilSense is the only company on the list that cuts mobility costs.
MobilSense has made great efforts to provide education and insights to industry best practices and domain specific feedback to customers and the industry. We believe we are being recognized for our historical efforts to build the most comprehensive, automated wireless management solution in the industry.
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