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Growth in enterprise Wireless services tracks society’s accelerating shift toward all things Wireless—smart phones, apps, tablets, and Wireless broadband. The following is our assessment of major trends and influences currently impacting enterprise Wireless deals.      

  • If given the choice, telecom consultants would prefer—by a wide margin—to work on a Wireless procurement as compared to a Wireline procurement:  They believe the opportunity to deliver substantial savings is far greater on Wireless deals.
  • Telecom expense management companies are in strong demand; capturing and tracking Wireless expenditures is a growing cost management issue for many enterprises.
  • As in Wireline deals, pricing can vary considerably among comparable customers.
  • Taxes.  As with rental car charges, expenditures for Wireless services are subject to a daunting array of taxes and surcharges that can approximate 25% of monthly Wireless service charges. These fall within four categories:

-State and local sales and excise state taxes, including E-911 surcharges/taxes, imposed directly on amounts paid for Wireless services,

-Property, gross receipts and other taxes imposed on carrier’s Wireless assets, operations and revenues (indirect taxes),

-Recovery of the Wireless carrier’s assessment for Federal and in some cases, state universal service fund contributions (USF surcharge recovery), and

-All-encompassing “regulatory cost recovery” surcharges.

  • The number of enterprises whose Wireless strategy is limited to employee Wireless cost reimbursement is declining rapidly, if not in free fall.
  • Multi-nationals must address globe-trotting staff and management, as well as foreign operations, in determining whether national, regional or global Wireless procurement strategies are appropriate.
  • The Wireless procurement cycle is heavily influenced by the handset cost recovery cycle.
  • Carrier’s standard Wireless agreements are far less convoluted than Wireline agreements; some are even readable, though terribly one-sided.
  • High level thoughts on Wireless agreements:

-The right to audit bills is essential

-Fixed pricing (custom plans) is always preferable to adjustable pricing

-Exclusive provider arrangements should be avoided

-A strategy for replacing handsets whose continued use is threatened or prohibited due to IP infringement litigation merits serious consideration

-The relationship between the customer-specific agreement and the carrier’s online documents (which it can change without notice) should be clearly defined (requiring something more than standard precedence clauses)

-Meaningful SLAs (service availability, quality and reliability) for Wireless services remain elusive

  • While approval of the AT&T-T-Mobile merger (even with every condition imaginable) is far from certain, consider finalizing new Wireless deals or major amendments in 2011.  Wireless procurements could become even more challenging if AT&T prevails in its quest for T-Mobile.