What's in Store for '24: 3 cellular trends that will affect your business

1. Cost-Cutting by Telcos: Impact on Service Levels

Telecommunication companies, or Telcos, have historically enjoyed substantial profit margins, yet they face the challenge of maintaining these margins while adapting to changing market dynamics. According to data from the Canadian Radio-television and Telecommunications Commission (CRTC), cellular plan prices decreased by 27% between 2019 and 2021. In response, Telcos are implementing cost-cutting measures, including reducing staff, which has noticeable effects on service quality. This trend is expected to continue into 2024, increasing pressure on IT teams that encounter longer wait times on phone queues, slower response rates, more reliance on self-service options, and potentially more service fees.

2. Surging Data Usage

The surge in data usage further complicates this landscape. Mobile phones are increasingly viewed as crucial business tools, with CRTC data showing a 19.2% annual rise in data consumption. Our customer base reflects this significant growth. Consequently, companies might need to expand their data allocations for their fleets - data overage rates in Canada range are significant, ranging between $20-$50/GB. Carriers are pushing corporate plans with a minimum of 10GB data, regardless of actual usage. While these larger data buckets seem cost-effective, companies may end up paying for more data than they consume, leading to inefficient spending.

3. Rising Device Prices: A New Challenge

Conversely, as cellular plan rates decrease, device prices rise. With more than half of subsidized plan costs going toward devices. In response, Telcos will explore incentives for Bring Your Own Device (BYOD) programs to mitigate their substantial device subsidies. As device prices reach levels comparable to laptops, it's becoming financially prudent to consider swift device repair options. Furthermore, as devices become more feature-rich and expensive, a new wave of competitively priced smartphones is entering the market. Second-tier cell phone manufacturers are introducing smartphones at the $300 price point, offering more budget-friendly alternatives.