Transparent billing is an essential quality in a machine-to-machine (M2M) service provider. Since M2M uses significantly less data than consumer devices — sometimes less than 100 kilobytes (KBs) per month — it would seem to be an exceptionally inexpensive service. But the per-megabyte (MB) data costs with M2M are considerably higher than consumer devices. In addition, there are a number of additional costs that could produce surprising results come billing time.
To avoid surprises, ask questions of any M2M providers you’re considering and look closely at the fine print before signing an agreement.
When considering the cost of plans, don’t get fixated on just the price per MB or plans with specified amounts of data, such as plans that allow for 1MB or 5MB of data usage. Instead, really delve into the details of an agreement to look at the components that make up the total cost of ownership.
For example, if you’re looking at SIMs, consider whether the provider offers removable or embedded SIMs. Removable SIMs are replaceable and can be moved between devices to accommodate changes over time. Embedded SIMs, however, allow for better remote activation and provisioning of devices. M2M providers that operate their own networks can often offer SIMs at reduced prices or volume discounts over mobile virtual network operators (MVNOs), which are companies that rent space from other network providers.
It’s especially important to review a provider’s policies on overages (also known as breakage). Are the prices for excessive data usage quoted as per KB or per MB? Keep in mind that while charges for data are often based on KB, overages can easily add up and you’ll be looking at paying per-MB costs of $30 or more.
Be careful of hidden setup fees. While some companies do not charge for setting up a service, others charge for setting up everything from application programming interfaces (APIs) to a secured virtual private network (VPN) and short message peer-to-peer bind (SMPP BIND) for sending SMS (text) messages. These fees can easily run into the $2,000 to $3,000 range. Fees for static Internet Protocol (IP), which is a one-to-one assignment of a device to an IP address, can include one-time setup or monthly fee-per-device costs. While the monthly per-device fee is typically only a few cents, this fee can add up if you are using thousands of devices annually.
Carriers regulated by the Federal Communications Commission (FCC), such as Verizon, Sprint, and AT&T, are required to add surcharges and taxes for specials such as 911. Some of these charges might increase a bill by 15 to 20 percent for data and voice plans. These charges are not as significant for non-regulated carriers like MVNOs.
M2Ms with their own carrier networks are better able to offer real-time data usage reporting and billing information. Conversely, many MVNOs derive their billing from carrier detail records (CDRs) at the end of the billing cycle. These monthly CDRs have to be processed and sent to the partner MVNO for distribution, which can cause delays and errors.
To get full visibility into your bill, look for a provider that offers detailed phone records that you’re able to download into an Excel file where you can sort, filter and analyze the data. This helps you identify outliers, such as devices consuming excess data that could cause overages, or devices that aren’t transmitting data, which might indicate an outage.
Getting control of your M2M bill starts before you even sign a contract. More than just the monthly rate, it’s important to look at the total cost per month when calculating your average charges. Once you add all the line items from the agreement, you’ll have a better understanding of your total monthly charges.