why data pooling is bad for business customers

We Won’t Get Pooled Again – a Better Approach to Mobile Data Plans

Apr 17, 2019
At first glance, data pooling plans for mobile devices seem like a great idea. Pay a monthly rate based on projected usage with a reasonable buffer and you can achieve cost predictability. By analyzing actual mobile data plan consumption against the monthly allotment, you can actively monitor and manage cost.

But on closer examination, the data pooling model is a bad deal for business customers. Think about it: If you stay under your monthly ceiling, you pay for data you don’t use – and the cost of that unused data quickly adds up. Over the course of a year, a monthly buffer of 8.5 percent (which is fairly aggressive) represents an entire month of unused data that you pay for. Carriers, meanwhile, encourage customers to play it “safe” and maintain buffers of between 15 percent and 25 percent of actual usage. (This allows you to manage to the anomaly or the unexpected streaming of events like March Madness.)

If you are a risk taker and keep a very lean pool, be very careful. Exceeding the monthly ceiling will subject you to exorbitant overage fees. Hence, one bad month can remove an entire year of expected savings and send the telecom team into a tail spin to wrestle back control of usage.

With pooling, moreover, it’s difficult to maintain visibility into how different departments and individuals consume data. What can happen is that egregious overuse by a few individuals can go undetected, leading to a situation where some departments with low usage subsidize others. Let’s say a business is capped at a total of 100 Gigabytes a month, and monthly usage ranges from 90 to 95 Gigabytes. While that seems like a cost-effective arrangement, the legal department might be consuming 70 Gigabytes, while sales, accounting and marketing teams are consuming 20 to 25 Gigabytes. What’s worse, a handful of rogue users who spend their days streaming video can break a pool, leading to internal overage charges being allocated to departments with reasonable levels of usage.

There’s a better way. Today, innovative data plans are available that allocate data to individual users. While all plan options are technically “unlimited,” each user is assigned an estimated monthly ceiling, based on past history and job function. If the ceiling is exceeded, no overages are involved; instead, data speeds are lowered until the end of the month. The estimated ceilings, moreover, are flexible – ranging from 2 to 10 Gigabytes for most users, with “premium” plans of 20 Gigs and higher available. Under this approach, businesses can tailor plans to the specific needs of departments and individuals, and bring predictability back into the environment.

In addition to eliminating overages and minimizing the cost of unused data, the plans provide transparency across business units and individuals. This helps procurement teams implement effective chargeback and cost allocation programs.

Business requirements for data are not a one-size-fits-all proposition. It’s time to recognize that, and to look beyond the outdated and inefficient model of data pooling.

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James Censabella

Jim  Censabella

Director of Sales, Mid-Market and Enterprise, specializing in leading solution teams, assessing customer requirements and aligning technology to business needs.

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