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REGION: UNITED KINGDOM
ENTERPRISE MOBILITY

Why the mobile 'tech fund' is no longer ideal for procuring mobile devices

Mobile phone technology has significantly improved in recent years, but many businesses remain locked into an outdated procurement strategy.

Firstly what exactly is a tech fund?

A tech fund is commonly used in the UK by network providers to lock in their customers. Essentially, it’s a fund that has been built up over the duration of the mobile phone contract which includes the device and the airtime. As your contract renews, you are given a number of devices you can have for “free” to help you. Customers then tend to refrain from exploring the market as it becomes difficult for customers to compare an alternative solution. In reality, the network providers have simply already charged you for this by building this cost into the monthly contract pricing. In essence, you have overpaid in the first place.

Organisations are starting to realise that this is not a sustainable model for the modern workplace. There is far more flexibility in our personal lives that has resulted in an increase in demand for data only sims. In Europe, the tech fund model has already largely dissolved. When you combine the lack of transparency and flexibility that these models provide, with the increasing mobile phone cost and increasing mobile data usage requirement. It’s clear to see why the tech fund model is no longer sustainable.

Here we highlight three reasons why tech funds are no longer the best approach for procuring mobile devices.

1. Tech funds result in overspending

A tech fund isn’t providing you with “free” money. You’ve signed up to a contract originally that means you help the network provider accrue this fund via your airtime bill. Ask yourself if you were given “free” money or “free devices” at the very outset of the contract? Can you compare the device cost versus the airtime cost? What happens if you don’t include the “tech fund” benefit in your comparison?

2. Tech funds lock customers into a solution that lacks transparency and flexibility

This fund can only be used to buy devices from your current network provider, whose device price might be more than what you'd pay if you procured the device externally. Also, you must use the fund before the renewal of your contract, or you risk losing it (compelling you to acquire whatever is in the network providers catalogue – which may not be the latest, greatest or even required by you). By using a tech fund, you are immediately tying yourself into using one network provider for a fixed term whilst bundling the cost of the hardware together with the cost of the airtime. There’s no clarity on how much the handset versus airtime costs and no easy way for you to compare.

3. Tech funds will dictate your mobile phone procurement strategy

Mobile phone procurement now needs to be looked at with consideration of the entire IT and security strategy and not just mobility in isolation. This is a result of the digital transformation and a greater need for mobile devices to allow us to stay connected and work anywhere at any time. Mobile phones are now essential business tools, ensuring we are always on and always connected. Being forced to use up a tech fund at the time dictated by your contract renewal date isn’t always in line with your business strategy. Likewise is it always in line with the latest handset release, therefore, forcing you to refresh early and purchasing devices that are not necessary.

CONTACT US

The best way to ensure a smooth transition when upgrading an IT project is to ensure you have plenty of time in hand and a plan in place. Here at CHG-MERIDIAN, we help to provide you with that plan. We support our customers at every stage of the technology lifecycle, right through from the consulting and procurement of your assets, to the data deletion and remarketing of those devices. Our finance models can equip your organisation with a regular refresh program, ensuring your IT estate is always at the forefront of technology. We tailor our solutions to each individual customer's needs, and it is because of the support we provide that our customers continue to choose us to help them realise their IT lifecycle goals.

Danny Persaud

Head of Sales Corporate

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