Operators and TEM: Is the Argument About the Fox Guarding the Henhouse Going Away?

K. Weldon

K. Weldon

Summary Bullets:

  • Nearly all Tier 1 US and global mobile operators offer multi-carrier telecom expense management (TEM), providing voice and data usage information, billing reconciliation, and cost allocation, as well as advice on service/spend optimization.
  • But independent TEM software vendors and IT service providers claim operators can’t be objective about mobile spend and shouldn’t be trusted to advise customers on how to optimize mobile expenses.

TEM is important because it is often the first step taken by enterprises to take control over their mobility environments. Before plunging into more extensive deployments of mobile applications or investing in more devices and service plans, they need to take a granular snapshot of what devices and services they already have, and see if they are spending wisely across all their carriers. At first glance it would seem unlikely that they would go to one of their primary carriers to get advice on where to spend (or not to spend) their telecom budgets. However, nearly all global carriers are now offering this as a managed service, often using platforms from leading TEM software vendors. Vodafone Global Enterprise has taken this a step further by acquiring two TEM vendors (Quickcomm and TnT Expense Management) and setting up a separate TEM practice with add-on professional services.

When competing against the operators, all of the remaining independent TEM vendors as well as a number of IT service providers doubt that an operator can be trusted to be objective, when it is potentially re-allocating the mix of voice and data services that include its own and its competitors’ offerings. However, we have become convinced that the “fox guarding the henhouse” issue is no longer relevant for the following reasons:

  • Most operators have set up separate groups to manage TEM that do not include any employee that receives commissions on voice or data sales.
  • Many have also maintained their TEM platform partner as an independent third-party doing the analysis and the optimization.
  • Perhaps the most important reason that operators are trusted for TEM is that if they were ever found to be pushing enterprises away from competitors and towards buying more of their own mobile services they would immediately lose all credibility.

So how well is this message resonating? In spite of the increasing role of the operator as a trusted advisor, Current Analysis’ research shows that only 21% of U.S. enterprises surveyed and only 18% of European enterprises surveyed are currently going to external providers for mobile expense management. However it also showed that within two years, about 70% of the European companies (who are not doing so today) and 77% of the US companies (who are not doing so today) would consider going to an external party for TEM.

Reasons for the uptake of externally provided TEM services over the next two years include the fact that enterprises are finding that “doing it themselves” even with the help of TEM software is proving to be too complex and cumbersome, especially on a multi-carrier basis; and the fact that the TEM software market is still fragmented with a number of small companies who have trouble scaling and offering adequate support.  In addition, the operators and IT service providers are tying in TEM with other highly related managed mobility offerings such as logistics and procurement, device and application management, and professional mobile advisory and implementation services, allowing enterprises to get their mobility needs fulfilled on more of a “one-stop” basis. So the market for operator-provided TEM will grow, and the fact that an operator is also providing mobile connectivity should not stand in its way.

About Kitty Weldon
As Principal Analyst for Enterprise Mobility at Current Analysis, Kathryn is responsible for analyzing events, companies, products and technologies within the wireless and converged wireline/wireless enterprise services and solutions space.

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