Mobile data usage takes off in multinational companies, but cost management is still a concern

Research from Ovum shows a trend to managed mobility services

For immediate release, 8 May 2008. Multinational companies are putting mobile data first on their shopping list for telecoms services. But they say the high cost of mobile data plans could limit their rollout of services to employees. They also want mobile operators to improve billing and usage reporting.

According to a new report from global advisory and consulting firm Ovum, the top three budget priorities for CIOs at large enterprises are mobile data, IP convergence, and overall cost management. However, there are signs that budgets are being directed towards mobile data in particular.

Ovum's latest research among members of the Enterprise VPN Users Association (EVUA), whose members include companies such as PWC, Mars, GSK and Shell, suggests that more companies are moving from talking about fixed-mobile convergence as a concept to undertaking practical integration projects. 

As a result, MNCs expect spending on mobile data to increase faster than any of the telecoms services they buy. Balanced over all areas of expenditure, we expect telecoms budgets to change little over the coming year. However, 71% of EVUA members expect mobile data budgets to increase significantly over the same period. Having said that, mobile data traffic is predicted to grow much more quickly than budgets. EVUA members expect their service providers to come up with increasingly competitive deals, especially internationally.

Ovum's ongoing research with EVUA members shows that cost management remains a major area of concern for all telecoms services. While many MNCs have had success in bringing core fixed voice and data network costs under control, there are still issues around the cost of provision in less developed countries. It almost goes without saying that in multinationals it is the cost of mobile (and, increasingly mobile data) that needs most attention.

This need for greater visibility and control of mobile costs is seen as a barrier to greater acceptance and usage of mobile data applications and convergence. The uptake of mobile data services has been fairly slow in multinationals to date. 'Arguably the rate of growth has been limited by lack of global contracts, multinational service availability & consistency and continuing high prices for international data roaming' says Pauline Trotter, Principal Analyst at Ovum's Enterprise practice.

In the past, EVUA members have not held back in expressing their frustration with the level of support from mobile operators in supporting mobility on an international scale. This is a continuing area of concern, since it makes managing mobile usage and costs difficult for MNCs. However, there has been progress in getting 'enterprise-grade' service from mobile network operators. One sign of this progress is that major managed services or outsourcing contracts for mobile dominate new sourcing strategies. Forty-seven percent of respondents in our latest survey said that they are considering such contracts in the coming two years.

While many companies still procure and operate mobile nationally, there is a trend towards regional and even global contracts and agreements, as well as a trend towards longer contracts.

Cost management, performance (delivery to agreed SLAs) and geographical coverage are the highest rated delivery criteria for service providers among EVUA members. For mobile services, the quality of billing and reporting is also high on the agenda - this (along with cost management) is the main area where they would like to see improvement from mobile providers.

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About the EVUA annual member's survey 2008

The annual survey looks at EVUA member's usage of voice, data and mobile services.

This is the fourth annual EVUA member's survey. It was carried out between January and February 2008, through an online survey of ICT managers.

Pauline Trotter is a principal analyst specialising in enterprise communications, and is responsible for Ovum's research among enterprise users, from SMEs to large multinationals.

About Ovum

Ovum is a global advisory and consulting firm. Its primary activity is providing value-added advisory services and consulting to retained and project clients. The company acts as a well-respected and trusted source of industry data, knowledge and expertise on the commercial impact of technology, regulatory and market changes. Ovum engages in continuous research and industry analysis to determine market dynamics in its specialist sectors.

Ovum has developed long-standing relationships with many of its corporate clients, which include major international blue-chip companies such as Alcatel-Lucent, AT&T, BT, Cisco Systems, Deutsche Telekom, Fujitsu, HP, IBM, Microsoft, Telstra and Vodafone.

Ovum is part of the Datamonitor Group.

About EVUA

The EVUA is an independent, non-profit, global ICT network user group for multinational companies. User membership is exclusively Fortune 1000 global companies. It was formed in 1992 and has evolved into an effective ICT industry platform for global users and global suppliers. The EVUA has excellent working relations with leading ICT network service and technology providers. The EVUA industry network includes independent industry partners, working links with regulatory organisations and links with other user groups.

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