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Q&A on corporate cellphone billing problems

Cellphone billing problems can frustrate households and hurt the family pocketbook. For companies, errors and hidden charges can amount to big-dollar losses.

One out of four employee cellphone bills has errors, according to cellphone bill auditing service Tangoe. The biggest problems are overcharging, roaming fees and continued charges for phones that aren't being used, the firm said.

Al Subbloie, the CEO of Tangoe, said the FCC’s action this week is a “good start” but the onus is still on the consumer and corporate subscribers to rectify their billing problems.

“Will it change behavior? I don’t know think it will change carrier behavior but it may have the potential to encourage a change in enterprise behavior toward reporting these issues,” said Subbloie, whose firm serves large- and medium-sized businesses.

The following is a Q&A from our discussion:

Q: Why are there so many errors occurring?

A: My opinion is that I do believe the model in the carrier community was designed ultimately that when errors occur, they favor the carrier.

Q: How does the billing model favor carriers?
A: If you are asking if it is a coincidence or design, I’d say design. Most enterprises have custom negotiated rate structures, which means that a company can customize plans for overage and international roaming charges. Most companies will negotiate those rates down, or below rates that are published by the carriers. So what happens when a carrier makes an error into the ordering system, the rates default to the higher, published rate. That occurs frequently. And other things like negotiated rates on roaming and data will often be charged the normal, published rate rather than the negotiated rate.

Q: Are these problems getting worse?

A: We haven’t seen it get better. What has exacerbated this is the explosion of mobile and there is brand new set of issues that have come to the table. We manage $9 billion telecom costs a year, or 1.2 million mobile devices and the cost of errors across the board will run from 1 to 7 percent of total telecom bills.

Q: What are some of the most common problems?
A: Zero-use devices. That’s when an employee leaves and a device ends up in a drawer somewhere. But without good procedure, the bill continues to show up. We had a very large financial institution during the financial meltdown that had 3,000 zero-use devices that were being billed for monthly access charges that weren’t being used.

Q: But isn’t that the fault of the company, too?
A: The carrier typically will blame the company for not informing them. But what’s also happened is that anecdotally speaking, it’s also getting harder for a company to get credits than before.

By Cecilia Kang  | October 13, 2010; 10:12 AM ET
 
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Comments

This article is pretty amusing since companies like Mr. Subbloie's rely on carriers making billing errors to turn profits. In fact, companies such as Mr. Subbolies also are responsible for generating the billing data for the carriers. So ether he has no understanding of the market in which he operates or he doesn't really believe what he is saying and this article is a pathetic attempt PR. Companies like Tangoe, Inc have to rely on PR campaigns because they have no interest in building a good product or providing reliable services for their clients but instead rely on merges and acquisitions funded via venture capital to survive. They acquire a profitable company, force out the base of the organization who have the knowledge and experience and then live off the existing client contracts until those they expire and then the cycle continues. You'll notice the only time Tangoe Inc came close being profitable was after its recent acquisition two years ago. Now, in the next year you will see it's profits trending downward as those 2-3 year contracts start to expire. It's basically a giant ponzie scheme similar to that of which Mr. Madoff is serving time for. Certainly, Tangoe Inc isn't the only company that works this way. In fact, capitalism dictates it works like this. Check out this for more information: http://davidharvey.org/2010/06/rsa-crises-of-capitalism-talk-animated/

Posted by: Egnineer | October 13, 2010 10:50 AM | Report abuse

I disagree with the premise about why errors tend to favor the Telcoms. It is the same false premise based argument grocery stores make when surveys typically find on average errors are in the stores favor. If the error were random, then it would be just as likely that the telecoms would misapply a lower rate than negotiated as over charging. If fact the article in the WP today indicated that the problem was often add-on that were never ordered but added-on anyway.

Posted by: crete | October 13, 2010 1:25 PM | Report abuse

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