Austin Business Journal
May 15, 2005
By Robin Ewing
In January, 8,000 employees at the Ford Motor Co. ditched their desk phones and went wireless. Sprint Corp. got the deal — the largest of its kind in the United States — and now it’s arming Ford’s mobile engineers with mobile phones.
Yet, businesses small and large wanting to go wireless need to sit up and take stock before cutting the cord.
“It’s super-heated. There is a lot of activity around the transition from fixed line to mobile,” says Richard Schwartz, president and CEO of SoloMio Corp., an Austin-based software developer for telecommunications operators.
A third of phone calls previously made from land lines have moved to wireless, according to a 2003 Federal Communications Commission report. Approximately 4 percent of U.S. households have cut the cord, says Linda Barrabee, senior analyst at the Yankee Group, a communications technology research and consulting firm based in Boston.
That’s more than 10 million Americans with no ties to traditional phones, she says.
The biggest reason for going wireless is reduced costs, says Iain Gillott, founder of iGillottResearch Inc., an Austin-based consultancy that researches wireless technology in the business world.
“The way Ford justified it is that every time someone moves to another cubicle or reorganizes or moves to a new building, there’s a cost associated with moving that phone and that phone number. There’s a wiring cost and an administrative cost,” he says.
To save money, Gillott says employees can share from a bucket of minutes similar to a consumer “family plan.” Yet, large companies should avoid having more than 50 percent of their phones with one carrier, he says.
“Then you have leverage against each of them,” Gillott says.
Another way to save money when implementing a wireless plan is to limit the types of handsets available to employees.
“Because they limit the number of choices, they also limit support costs,” Gillott says.
Though sophisticated phones can be expensive, what is important to look at is the impact on workforce productivity, says Jeff Fugitt, vice president of marketing at Traq-wireless Inc., an Austin-based company that manages and optimizes large corporate mobile environments.
“For a business looking at a mobility strategy, you need to segment your employee base and see what is going to improve their productivity,” Fugitt says.
Ipsos-Reid, a Canadian marketing research firm and member of Paris-based Ipsos Group, reported that BlackBerry users recovered an average 53 minutes a day in productivity that could otherwise be lost.
However, there are logistics to consider. In the past, mobile phones have lagged behind fixed lines in call services and office infrastructure offered. For instance, when a call comes to an office phone, there are options on how to answer that call, such as transferring, conferencing and forwarding.
“There is a whole well-developed ecosystem around the proper business communication,” Schwartz says. “That puts pressure on the cell phone because it doesn’t have as well-developed capabilities.
“Carriers are all pretty aggressively trying to go through this transformation so they can support the companies with a greater range of expertise. It’s a big change,” he adds.
A company needs to look at the carriers’ international plans, data plans, customer service and voice services to evaluate if the carrier can support its business needs, according to Schwartz.
Yet, the general unreliability of mobile phone service is the main reason some businesses aren’t clipping their land lines just yet, says Jason Hillery, spokesman for San Antonio-based SBC Communication Inc., which provides local, long distance and Internet service. SBC also owns 60 percent of Cingular Wireless LLC, the largest wireless phone service carrier in the United States.
However, dropped calls, calls on mobile phones that unexpectedly disconnect, are becoming less frequent as wireless carriers beef up their infrastructures from city to city.
“One [carrier] might drop calls on Southwest Parkway, another under the bridge, another somewhere else,” Gillot says. “But I get very few dropped calls. Three or four years ago, it was a different story entirely.”
Gillott suggests signing up for a 30-day trial with a new carrier to test for drop spots in a home or office. All carriers should offer the test option, he says.
Hillery says SBC is isn’t seeing as many transitions from fixed lines to wireless, as it is seeing more movement toward bundled services that offer both fixed line and wireless features. For example, SBC is developing a handset that will switch from a fixed line to a mobile connection as the user moves from place to place, Hillery says.
Despite increased flexibility, however, wireless phones still have their share of problems. In 2004, the Better Business Bureau ranked the cell phone industry as the second most complained-about type of business.
“It’s a struggle,” Schwartz says. “But the line is blurring pretty dramatically between the fixed-line services and the cell phone services.”
“The cell phone today is as powerful as the PC was three years ago,” Gillott adds. “In one year to 18 months, we’ll get to the point where a cell phone will have the same power as a desktop.”