Telecom expense management and the Internet of Things (IoT)

By Tanya Seda

IoT is moving rapidly from something to keep an eye on for future planning, to a real “thing” that has to be dealt with. In able to understand IoT costs you need to have some knowledge about your network communications costs because connecting devices to the Internet is what IoT is all about. Gathering and managing this big data sub-set is an enormous task to take on for any enterprise, an effort smart companies are turning to TEM providers to identify and collect the necessary information.

A key challenge to IoT is that connecting all of your end devices, wherever they may be, poses a significant challenge and is dependent on multiple requirements including technical, security, performance, reliability, and location. Because there are many options when choosing connectivity it’s important to be well versed in all possible paths.

Today, many enterprises are moving to mobile networks to give them better control over the IoT experience. There are five factors that can impact your total ongoing operational costs. Each have unique characteristics that are important to understand when building your technology expense management plan:

Monthly access fees: IoT service plans typically have a monthly access fee for connecting to the mobile network, and this charge is often independent of the fees incurred for data usage.

TIP: It is important to keep monthly access fees in check if the lifecycle of your IoT service includes periods of non-connectivity.

Data plans: Fees for IoT deployments are typically either pay-per-use, where you pay per kilobyte, megabyte, or gigabyte, or per- device; and you typically subscribe to a fixed amount of data per month. Gartner has mentioned that as little as 25 kilobytes per month, while others can be as much as 1GB per month. Consider that typical IoT applications use significantly less data per month than consumer phones or tablets.

TIP: Check id paying per MB may be the most cost effective, especially if the monthly usage fluctuates. For some enterprises with devices that have higher data usage, per-device plans with pooling could be the most cost effective, especially if the monthly usage is consistent.

Overages:  For most enterprises it can be difficult to estimate the amount of data required for your services, especially if they’re relatively new. Some providers offer flexible rate plans that allow you to change your plan in the middle of the billing cycle.

TIP: Plans are ever-changing.  There are certain plans that let you pool data usage across a large number of devices, which in some cases can help you control your rates. If available, both of these options could help you avoid unexpected and costly overage charges.

Roaming: If your devices will be in used by those traveling to other countries, consider what coverage will be needed. If so, there are usually additional charges for roaming, which vary by country and zone. In Europe they finally abolished cellphone roaming as of mid-June for example. However, digging deeper into the regulations we noticed this pertains to only those European cellphone contracts for roaming. Americans traveling on the Continent will still face high fees.  Be sure to adjust international plans to reflect your time frames and needs ahead of time.

Rounding: Some providers limit the amount of time that a device can be connected to their network. We have seen sessions typically lasts four hours before the device is disconnected. This provider technique is used to free up resources on the network. The provider issues a time stamp once the four-hour session ends. They typically, round up usage one KB.

TIP: Stay on top of time used per device. 1 KB doesn’t seem like a lot until you view this overtime based on thousands of devices.

Taxes and surcharges: One of the biggest expenses on your mobility invoice.  Providers which are governed by country- specific regulatory bodies, are required to charge more taxes than non-regulated providers. Although these costs may vary, the carrier can issue you estimates if asked.

TIP: Keep track of your mobility charges for all types of devices. IoT is tricky and usage as well as costs will add up quickly if not managed appropriately.

(Tanya Seda is the Chief Strategy Officer at Network Control).

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