Government to shave $5m off civil service mobile bill

Contracts with Vodafone and Telecom negotiated for more than 200 agencies

Internal Affairs has slashed up to $5 million off public sector mobile phone bills after renegotiating government-wide contracts with Telecom and Vodafone.

More than 200 agencies – including Internal Affairs, local authorities and Crown-owned firms – use the contracts, which allow them to buy mobile services at pre-negotiated rates without having to go to tender.

Agencies can save about 11.5 per cent a year under the new Telecom contract and about 20 per cent a year under the Vodafone contract – which will equate to between $2m and $5m a year.

The new deals include sinking price caps, so pricing will not be adjusted upward if the number of connections under a contract is reduced, and will see increased reporting and monitoring of the contracts.

Telecom has agreed to "very aggressive" pricing for low to medium data usage and included a new BlackBerry plan that does away with the need for licences.

This will save $180 per BlackBerry connection.

Vodafone has meanwhile reduced pricing for handsets and BlackBerry connections.

Stephen Crombie, head of Internal Affairs' Government Technology Services unit, says the price cuts were negotiated under its normal contract review process and it will re-tender for public sector-wide mobile services next year. The contracts tend to be used by smaller agencies as larger agencies have more specific requirements for mobile services.

Mobile usage is on the rise, but agencies' bills will still be lower under the new terms, he says. "Government will be looking for increasing value for mobile services because voice is moving to mobile. We'll be looking for savings and better value."

Jamie Macdonald, chief operating officer of mobile consultancy Mobile Mentor, says mobile data usage in particular is experiencing huge growth and large organisations are pushing for savings from their suppliers.

Mobile users are adopting smartphones – which are becoming vital for productivity. "They're more a laptop in the palm of your hand and the average smartphone has more capability than a laptop that is three to five years old."

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