Why tech funds no longer work

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For many years, tech funds were the most popular way to control your business mobile budget.

Essentially a tech fund is a virtual pot of money, held by your network provider, that allows you to purchase products and services at any time without the need to make an additional capital investment.

The fund is created when mobile networks add ‘extra’ costs on top of your underlying mobile network charges, then refund an element of this extra cost in the form of a ‘tech fund’.

Tech funds were ideal for businesses where CAPEX sign off was difficult to obtain and who doesn’t enjoy a new mobile phone on contract renewal, but does it really offer your business the best value for money?

Additionally, there are three market changes challenging the tech fund model:

  • Increasing number of users – the number of company mobile users has increased, placing pressure on the tech fund’s ability to keep up with device demand.
  • Increasing mobile device costs – expensive smartphones are increasingly difficult to subsidise using the network ‘tech fund’ model.
  • Increased mobile security, data leakage and compliance risks – increased security and support costs for the business.

The tech fund model locks your business into a fixed contract length, but business requirements change rapidly and fixing your device refresh strategy to a contract renewal is always going to have a negative impact on your ability to make the right decisions for your business.

Tech funds lead to:

  • Overspending – mobile networks profit from holding your ‘excess’ payments in a tech fund. The sooner you remove them, the better your chances of controlling your mobile device and network expenditure.
  • Contract lock in – presented as device subsidies, tech funds are in fact designed to remove competition, allowing the network to charge higher than market prices.
  • Loss of visibility – Tech funds are simply ‘off-balance sheet loans’ that can only be used to buy devices through one supplier. Unlike loans, businesses have little insight into how their money is accrued and spent.
  • Wasted resource – the funds are often used for automatic upgrades when new devices are launched, skewing normally rational business decisions about the allocation of new devices. Your business would be better off electing to take immediate tariff reductions on your network agreements, reducing operating costs.

What’s the answer?

NTE offers a range of flexible SIM only business mobile plans tailored to meet your exact needs. Our established relationships with Vodafone, O2 and EE allow us to offer the most flexible and competitive tariffs on the market. Our commercial analysts can recommend ways to save on your current contract and once your services are with NTE we constantly monitor usage and alert you to any overspend, advising on further ‘in contract’ changes to make savings.

Unlike most IT expenditure, mobile costs are also highly sensitive to end-user behaviour and we will guide you on the technical and educational options available to help you manage staff usage and minimise your business spend.

As it’s a SIM only offer, you only refresh hardware when you need to. Our flexible, monthly leasing options provide a cost-effective way to manage your mobile hardware spend with complete visibility. Choose from a mix of simple user devices to the latest Apple and Samsung smartphones.

Want to learn more? Talk to our mobile specialist, Shaun Broderick today.

Shaun has years of experience in the mobile business and is on hand to answer any questions you might have.

Want to see how we can help your business?

Contact our team today for a no-obligation review.

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