When considering the investment your organization makes in enabling employees to get work done on a mobile phone, it’s important to look beyond the purchase price of the device. Monthly cellular service plans, IT and administrative overheads, lifecycle management expenses and software licensing costs must all be factored into your total cost calculation. For organizations adopting a BYOD policy, mobile stipends paid to employees also become a significant part of the cost analysis.

How Much Does Mobile Cost per Employee?

According to a recent study from Oxford Economics, the total cost of mobile enablement for a 500-employee organization is $1,817 per employee over a standard two-year cellular connectivity agreement. This represents an annual investment of $908.50 per employee.

For larger enterprises, volume pricing and economies of scale help to reduce total costs. For example, the study estimated a 10,000-employee organization spends on average $1,408 per employee over a two-contract period, or $704 annually. Even larger organizations may see further gains in cost efficiency.

For a detailed analysis of your total investment in mobile phones, connectivity and management, use our enterprise mobility cost calculator to compare your expenditure with that of similarly sized organizations in your industry.

What Do Most Businesses Spend on Phones?

The purchase price of the mobile phone itself is highly dependent on the model of device chosen, as well as the level of subsidy provided by the carrier as part of your mobile service plan.

According to the Oxford Economics study, the average amount spent on mobile phones per employee is $309.17. Some organizations may pay substantially less than this if they’re purchasing entry-level devices and receiving a subsidy from their carrier as part of the two-year mobile service plan. On the other hand, a premium device purchased unlocked and without a contract will cost substantially more. Because of the prevalence of subsidies in the U.S. market, it’s important to look at device acquisition costs and monthly cellular connectivity costs together.

What Is the Average Cost of a Mobile Service Plan for Business?

Businesses pay significantly less than consumers per line when it comes to mobile service plans. While a consumer signing up for unlimited voice and data will likely pay in excess of $70 per month, large enterprises may be able to negotiate per-line rates of less than half that.

According to the Oxford Economics study, a 500-employee company pays on average $36.50 per month per line for mobile voice and data. A 10,000-employee enterprise spends on average $32.50.

It’s important to note that enterprise-level mobile service contracts will typically not be unlimited in terms of voice minutes and data. Often the carrier will offer a plan where minutes and data are pooled, and caps are set on the cumulative volume consumed by the entire group of users. This allows mobile power-users in an organization to run through more minutes and data, as long as total usage across the enterprise remains below the cap.

How Much Should You Provide as a Mobile Phone Stipend?

For organizations adopting a BYOD policy, device acquisition and mobile service plans may not be part of your cost equation. However, mobile stipends — payments made to compensate employees for utilizing their personal smartphone for work — will be a significant expenditure.

The Oxford Economics survey found that BYOD organizations are paying $36.13 on average as a monthly mobile stipend. Nearly 90 percent of companies with a BYOD policy pay a partial or full stipend to employees.

What Is the Overhead Cost of Managing a Mobile Phone Program?

Understanding the total cost of mobile enablement requires accounting for the in-house personnel involved, as well as any fees paid to third-party service providers for lifecycle management. The in-house administration of a mobile program falls primarily on the IT department, but other teams such as legal, human resources, payroll and even executive leadership may also spend time supporting the initiative over the course of the year.

Additionally, the Oxford Economics study found that more than two-thirds of organizations outsource at least some aspects of their mobile management.

Combining both in-house and outsourced costs, the study estimated total costs for program management in a 500-employee organization to be $658 per employee over a two-year period, or $329 annually. For a 10,000-employee enterprise, this was reduced to $357 over two years, or $178.50 annually, as a result of economies of scale in many aspects of mobile program management.

How Much Should You Spend on MDM Software?

Mobile Device Management (MDM) or Enterprise Mobility Management (EMM) software is essential for effective IT oversight and control of a mobile phone fleet.

EMM software providers such as BlackBerry, Citrix XenMobile, IBM MaaS360, Microsoft Intune, MobileIron and VMware Airwatch offer a range of solutions, often with several tiers of products available depending on the capabilities that the customer requires. Typically, EMM software licenses are priced on a per user, per month basis.

According to the Oxford Economics study, a business with 500 employees pays on average $102 per user over two-years for a basic EMM solution, equivalent to $4.25 per month. A larger enterprise with 10,000-employees pays on average $90 per user over two years, or $3.75 per month. Organizations in regulated industries, which typically require additional security threat analytics and information protection capabilities, may spend up to 1.8 times this amount, according to the Oxford Economics model.

Is the Investment in Mobile Worthwhile?

Organizations are investing significant resources in enabling employees to access work from mobile phones, but the productivity gains mean the investment pays off very quickly. A 2016 study from Frost and Sullivan found that employees estimate they are 34 percent more productive due to their mobile phones.

The reality is that, today, mobile is mandatory. For IT and business leaders, the question is how effectively are you leveraging mobile devices and applications to generate a return on your investment?

Download the Oxford Economics study to find out which companies are seeing the biggest returns on their investment in mobile.