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(Jupiterimages/(C) 2009 Jupiterimages)
(Jupiterimages/(C) 2009 Jupiterimages)

Cost containment

These startups help cut your cell bill Add to ...

Ann Bosley never paid much attention to her cellphone bills, but when the vice-president of Toronto’s Bosley Real Estate decided to buy a second home in the United States, she wanted to calculate how much her non-Canadian calls would cost.

After reviewing her statements she thought her bills were high, but the real-estate agent was reluctant to call her carrier and wait on hold for hours. “Time is money in our business,” Ms. Bosley says. “I couldn’t afford to wait.”

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So she found someone else to haggle on her behalf.

Six months ago, Ms. Bosley hired MobileVantage – one of a number of new Canadian companies that negotiates mobile rates on behalf of individuals and small businesses – to help get her cell costs under control.

Business executives and owners are increasingly outsourcing their telecom bill negotiations. Ted Gorsline started MobileVantage 18 months ago and already his phone is ringing non-stop. At first he took every client he could find – individuals and smaller firms — but now he’s focusing on small businesses. “Business owners want to sell their products, not worry about cellphone expenses,” he explains. “So companies have been more receptive to the idea of someone else taking charge to cut costs.”

Ross Pinkerton, CEO of Toronto’s ERA Canada, a company that helps reduce costs for medium-sized business, has also fielded an increasing amount of requests to deal with mobile bills. Mr. Pinkerton doesn’t deal exclusively with cellphones plans – he tries to cut expenses across all areas of a business — but he has seen client bills soar in the past few years.

“Wireless costs have increased markedly,” he says. “We have a more mobile work force, people are working out of the office, there’s greater functionality on smartphones – it costs money to do all that.”

He says business owners are more receptive to getting outside help to reduce costs than most Canadians. While a lot of the entrepreneurs he’s worked with say they’re comfortable reigning in labour or freight costs, with complicated plans and bills that vary from month to month, many of his customers are at a loss when it comes to navigating the wireless space.

“Costs are trending upward significantly and steeply,” Mr. Pinkerton says. “And no one in an organization can say why.”

Sarah Prevette, CEO of Sprouter.com, a website that connects entrepreneurs with business experts, isn’t surprised that companies such as MobileVantage are popping up and doing well. People often know they’re paying too much for their cellphone usage, but many small and medium-sized businesses (SMBs) simply don’t have the time, or the patience, to cut through all the red tape.

“These consultants directly correlate with how terribly bureaucratic and how unsatisfied people are with telecom companies. If an entire industry is coming forward to navigate the process, maybe it’s time for the process to be revamped.”

While people can, of course, call their carrier themselves, Yale Holder, president of Mycellphonemyterms.com, a Toronto-based company that also works with businesses to lower mobile payments, says because company’s like his negotiate plans all the time, they have access to discounts that consumers don’t know about.

Mr. Holder’s company usually helps clients at the end of their contract. He takes a customer’s bill and runs the numbers through a system that spits out a recommended plan that’s partly based on previous negotiations he’s done. That gives him a place to start.

A month or so before the plan ends, Mr. Holder gets representatives from Rogers, Telus, Bell and Mobilicity to bid, via an online system, on the contract. Sometimes telecoms fight for one client, but Mr. Holder typically gets the carriers to bid on numerous accounts at once. That gives the telecoms more incentive to sweeten the offer, since they’re buying in bulk. The goal is to get plans that are cheaper than the recommended option his computer program suggests.

While it may seem like the best deal would come from a company’s current provider, that’s often not the case. It depends on the size of the company, Mr. Holder says. Operations with more than 50 handsets often stay put – since carriers are dealing with many phones they’ll often come down in price to retain business. Companies with less than 50 handsets move to new carriers about 50 per cent of the time.

“The margins are tighter for smaller companies, so where someone chooses to go depends more on what options they’re looking for,” Mr. Holder says.

Mr. Gorsline helps people in the middle of their contract. Instead of trying to get the best deal for a new three-year term, he looks at bills and figures out where businesses are overspending.

Ms. Bosley sent Mr. Gorsline three months of bills for three cellphones — hers, her husband’s and her daughter’s — to pour over and found that she was paying an excessive amount of money for Canadian long-distance calls, U.S. roaming fees and local calling overages. It was a clear case of the plan not fitting the calling pattern.

Using a flawed plan is common, he says. People may sign up for the right product initially, but as their business grows, calling habits change but the plan stays the same. Some people have plans so outdated that they’re not even offered any more. Ms. Gorsline’s was geared toward customers with a five-MB data limit – the average today is 500 MB.

Surprise long-distance charges can also wreck havoc on a bill. Sometimes a person can pick up a signal from another city – it happens in more densely populated provinces such Ontario – without knowing. Someone might be in Port Hope, Ont., for example, but pick up an Oshawa signal. While a recorded message warns people to dial ‘one’ if they’re making a call outside their city, incoming calls appear as normal even though long distance charges apply.

Ms. Bosley travels frequently and she is always in touch with her agents, but her plan didn’t reflect that. “Telcos often set people up without knowing anything about their calling patterns,” she explains.

Mr. Gorsline put her on a North American data plan and long distance that covers her frequent out-of-town calls.

The whole process can take a few days to a few weeks, depending on the size of the company. Ultimately, Mr. Gorsline and Mr. Holder say they save customers, on average, 50 per cent of their bill. MobileVantage saved Ms. Bosley’s family $10,000 a year. “These fresh-faced kids are brilliant,” she says.

She was so happy with Mr. Gorsline’s service that she invited him to talk to the 210 agents she manages. So far, 30 have asked him to look into their bills, but he expects more to call.

Mr. Holder and Mr. Gorsline make money based on the amount saved. In most cases, the negotiating companies take a percentage – often half – of what they save someone over a number of months. If they reduce a bill by $100, they’ll take $50. “Clients are still spending a lot less,” Mr. Holder says.

While it’s likely these companies will be busy for a while, Rony Israel, a partner with BDC Consulting, says he questions their longevity. “They’re taking advantage of a period in time where businesses need to readjust and service providers are trying to take advantage of existing contracts that are already in place,” he says.

As wireless competition increases, plans should become cheaper and simpler to understand, making it easier for the busy business person to handle the calls.

Mr. Holder doesn’t disagree. But while plans will become less complicated down the road, there will always be a lot of options and add-ons for people to choose from. That’s why he’s developing a process where people can use tools to pick the right plan themselves, without Mr. Holder’s intervention. “We want to automate a lot of the process so consumers can check plans themselves and leverage our tools,” he explains.

Until then, more businesses are likely to seek out help to bring down their mobile bills. Ms. Bosley is hoping her agents, many of whom pay hefty cellphone charges, follow in her cost-cutting footsteps. “A lot of people have old contracts,” she says. “But they’re too busy to take advantage of new offers. I hope they get help.”

Special to The Globe and Mail

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