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11/27/2009

Uniquely Canadian Business Driver for Unified Communications - High Cell Phone Rates

Many companies use a combination of desk phones and cell phones or Blackberry type messaging devices to ensure that staff can always be reached. And in many cases, particularly for customer-facing staff members, the cell phone number becomes the one that is used for all incoming calls. Customers know that they can reach you on your cell, wherever you are, so that's the number they call.

Business Cell Phones - an unknown cost

In fact, one industry estimate concluded that 80% of business cell phone calls are made from inside the company's own carpeted space - in other words they could have used a land line instead.

There are two problems with this. The first is that Canadian cellular telephone rates are among the highest in the world, and by a wide margin the highest among the G8 nations. The second problem is that cell phone bills are usually sent to the employee and expensed rather than coming through the IT budget, so nobody really knows how high the net telephony costs for the organization actually are.

Increased Competition?

The Federal Government recently announced that it would auction off new previously unused sections of the cellular radio frequency spectrum. They recognized that the cellular rates charged by the existing three companies (Bell, Telus and Rogers) were completely out of line with international standards, which is why they set aside roughly half of the new bandwidth for new carriers. The intent was clearly to increase competition with the hope that market pressures would bring the rates down.

Don't count on it, at least not any time soon. The new bandwidth being sold is enough to support one new national carrier. There are two candidates who will likely bid on the rights to use it, MTS/Allstream and Quebecor/Videotron. Both are large and well established network providers, which is good because setting up a new cellular network will be an extremely expensive proposition. And it will take several years to complete, even for a company that is already in the networking business.

So at best we can expect one new cellular carrier to start operating some time in 2010. But how much will it affect the cellular rates that you currently pay? Well, a new provider will probably need to spend in the neighbourhood of $1 Billion to build a new national cellular network from scratch. And this new player will want to recoup some of these massive implementation costs, so they won't have a lot of room for radical rate reductions. The best bet is that the existing three providers will start discounting cellular rates to retain existing customers, probably using special package deals. And that will probably start to happen in late 2009. But in the mean time, it's business as usual.

The Unified Communications Alternative

Single Number Reach

Single Number Reach (which we don't usually abbreviate as SNR, because that already stands for Signal to Noise Ratio) means that each person in your company has one and only one telephone number that they give out to the world. When people call your number, one of two things happens. In some cases, the telephone system knows exactly where to reach you and just rings that phone, perhaps the one on your desk. But in the more general case, the system just rings all of your phones - your desk phone, your home phone, your cell phone, the phone on your second desk back in the warehouse, and so forth. Then you pick up the one that is most convenient to you. The external person doesn't need to know anything about it. You don't have to have an outgoing voicemail message that says "if this is an emergency, please call my cell phone".

Transfering Calls to Yourself

With the Cisco implementation of Single Number Reach, you can go one step further. If you were standing by the photocopier when the call came in, and had to take it on your cell phone, you can just walk back to your desk and say "hold on a second". Then you hang up your cell phone and pick up your desk phone. Because the central Cisco Unified Communication Manager is handling the call, and it knows to treat all of these numbers as extensions of you, it will automatically transfer the call to your desk and let you carry on the conversation.

Suddenly you don't need to waste all of those cellular telephone minutes while you're sitting at your desk anymore. And, in many organizations where recording of calls is important for compliance or quality control reasons, these inbound cellular calls are implicitly included in the recording system.

Dual Mode 802.11 Phones

The final piece of the cell minute puzzle is the use of dual mode 802.11 phones. Several cell phone makers are now building phones with two radios in them. One is for connecting to your cellular provider's network. The other is an 802.11 (usually 802.11g, although 802.11n devices are just around the corner) radio that allows your phone to connect to your office's WiFi network. If the phone includes VoIP software running Session Initiation Protocol (SIP) or Cisco's proprietary alternative, Skinny Client Control Protocol (SCCP), then it will look to the corporate VoIP system like a standard IP telephone, which you can include in your Single Number Reach for a user.

The usual configuration would be to have the Single Number Reach feature call your desk phone and the SIP phone in your dual mode cell phone first and only use the cellular provider network if you fail to pick up at one of those "free" numbers. In this way you will never use the expensive cell phone network unless you are actually outside of the office and there is no alternative.

And this is even better for telecommuters. When you're in your home office your dual mode phone can also connect to your home WiFi network. It will then register with the corporate VoIP system over the Internet and all of your work calls can be transparently routed to your home.

Several providers currently make dual mode cell phones with SIP software. CNG is currently studying phones from Nokia as well as some WiFi capable Windows Mobile phones, for which SIP software is available from third party software vendors.

Dual Mode Blackberry Devices

RIM does have dual mode Blackberry devices such as the 8820. They did include a SIP client in some older dual mode Blackberry models such as the 7270, but there is no current model Blackberry device that has this capability. And we are aware of no third party SIP software for the Blackberry 8820, but there are persistent rumours that Cisco and RIM are working together to produce SCCP client software for the dual mode "Pearl" 8320 Blackberry devices. Given the massive popularity of the Blackberry devices among business users, this would be an extremely important development.

Unfortunately, the Blackberry "push mail" data model and the Blackberry PIN instant messaging are actually very difficult to integrate with a corporate WiFi network. The problem is that these services make use of a separate dedicated network provided by RIM and transported over the cellular carrier's network. So it is not possible to completely remove your Blackberry from your cellular provider's network while you are inside your company's office. But this tends to be a relatively small fraction of a user's monthly bill, so significant savings are still possible.

Canadian Cellular Cost Savings

It's hard to precisely estimate how much your organization will be able to save on its cellular costs just from migrating to a Unified Communications system with Single Number Reach. The key variable is obviously how much time your staff spends on their cell phones while inside the carpeted space. But CNG has done some fairly representative and typical estimates that show that many organizations should be able to reduce their cellular plans and consequently their costs by as much as 40%. It's reasonably common for business cellular customers to have a monthly voice/data plan that exceeds $100/month. So if you have 100 such users, you are looking at an annual savings of $48,000 from cellular savings alone.

Naturally, your mileage will vary, but the critical thing is that this cost reduction is in addition to any other of the more commonly cited motivations for moving to a Unified Communications such as replacing old obsolete key systems and PBX equipment, reduced trunk costs, long distance toll avoidance and radically reduced teleconferencing costs. In Canada at least, the time has never been better for businesses of all sizes to embrace Voice over IP and Unified Communications.