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SA wastes R20bn in telecom spend

Regina Pazvakavambwa
By Regina Pazvakavambwa, ITWeb portals journalist.
Johannesburg, 25 Jun 2015
Many businesses are unwilling to take a closer look at telecom's inefficiencies and wastage, says Nebula's Daniel Nel.
Many businesses are unwilling to take a closer look at telecom's inefficiencies and wastage, says Nebula's Daniel Nel.

Businesses in SA are collectively wasting R20 billion a year on their telecoms expenditure.

This is according to Nebula's white paper, which estimates the telecommunications market in SA is worth around R200 billion. Half of this - R100 billion - is business spend and a fifth of this is wasted.

Mobility, and telecoms products have become so complex that disconnect between what companies are using and what they are paying for, costs them R20 billion each year, says Nebula.

The report says mobile is an area of over-spend many businesses are familiar with; for example, bill shock due to international roaming or data use outside of bundle.

Another wasted point is unused, or dormant, infrastructure and contracts that are still being paid for, SIM cards that don't get reallocated when someone leaves a company; or fixed lines that are no longer used, it adds.

Nebula discovered there is a lack of oversight and management of spend by companies, and in some cases there is also simply bad selling by the operators. Businesses should, however, take ownership of their spend.

Daniel Nel, CEO of Nebula, says because of the complexities involved, many businesses are unwilling to take a closer look at inefficiencies and wastage in their own telecoms systems, despite the potential savings.

Nel points out although organisations are there is wastage, they are not sure to what degree.

For businesses to avoid wastage in telecommunications, it is imperative to take a comprehensive approach to auditing and controlling the operational spend, he adds.

"Best practice management of the telecoms expenditure does not only serve to reduce wastage, it can also support required investment in new technology and ICT."

According to AMI Strategies, the key part of getting a handle on the enterprise telecom spend is to determine the "current state" - or where the enterprise is now in terms of managing the telecom expense process.

Telecom expense management has evolved over time and passed from one team member to another with minimal documentation, it says. It's important to constantly evaluate processes based on strategic value, and results produced, it adds.

"By removing complexity and constrained telecoms thinking, and introducing simplicity and unconstrained telecoms thinking, telecommunications can become an essential vehicle for a business's growth, rather than an expense," says Nel.

Businesses can then reallocate the savings and resources into innovation, better service and becoming more competitive.

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