| Time to Negotiate a New Telecom Contract? | | | | contracts can be written for shorter or longer |
| Great! After reading this article you'll be ready to | | | | periods. Like volume commitments, the longer the |
| negotiate that next telecom contract like a seasoned | | | | term - the better the rates. Service providers are |
| pro. The first steps to successful telecom contract | | | | usually willing to renogotiate an existing contract , |
| negotiation begins by simply understanding the key | | | | even if only half the contract remains. Before |
| areas which most contracts are based. | | | | renegotiating an existing contract, be sure that there |
| Sound simple? It is, so let's get started! | | | | are no early termination penalties or fees in the |
| Telecom Contracts: Do We Really Need Them? | | | | existing one. |
| Businesses sign contracts for all types of telecom | | | | 4. The net rates are usually expressed in terms of |
| services. In fact, you may have contracts in place for | | | | specific discounts off regular published rates. |
| local, long distance, wireless, voice and data, etc. | | | | However, some express specific rates in lieu of |
| Keep in mind that the information contained in this | | | | service guide pricing. Bottom line? Be sure you know |
| article can be applied to just about any telecom | | | | which is which during negotiations! Always be sure |
| contract negotiations. | | | | that you know the EXACT terms of the agreement |
| A telecom service contract is an easy way for a | | | | before you sign on the dotted line. |
| service provider to lock you into a predetermined | | | | 5. Some published rates may be specifically waived. |
| rate structure and set of conditions for a specified | | | | Such waivers are common for installation charges and |
| period of time. Having contracts in place makes it | | | | certain elements of private line pricing. Make it a point |
| easy for a carrier to count customers. Multi-year | | | | to ask to have these kinds of charges waived during |
| contracts also help solidify the customer base - in | | | | your negotiations. After all, you won't get it unless |
| other words, they can count on predictable revenue. | | | | you ASK! |
| Contracts can also be to your advantage as well. | | | | 6. Most telecom contracts include a provision that is |
| Having contracts in place eliminates the guess work | | | | included for promotional and other credits. |
| when conducting routine audits of your telecom | | | | These are applied at scheduled times to off-set |
| services. You'll never be able to verify that your | | | | costs of converting from other carriers' services. Be |
| accounts are being billed correctly without using | | | | sure to make specific notes of these credits at the |
| contract terms and rates as a comparison. | | | | time of negotiation so that you can be sure they |
| The 7 Key Elements Included in Almost All of the | | | | were actually credited in the future just as the |
| Telecom Contracts You'll Sign | | | | contract reads. |
| Listed below are seven common characteristics and | | | | 7. All telecom contracts provide for penalties if |
| elements that will arise when negotiating your | | | | violated. |
| telecom contracts. Use them as a "checklist" before | | | | Sounds basic but....ALWAYS be sure you understand |
| you begin. It's best to know what you want before | | | | the penalties and costs associated with violating the |
| negotiations get under way. | | | | terms of the contracts you sign. Penalties and fees |
| Keep in mind that the best deals seem to materialize | | | | can be substantial so make sure all contract |
| when there is the element of "win-win" involved. | | | | information is provided to new employees who will |
| Concentrate your negotiations on just two or three | | | | be overseeing telecom should the original negotiator |
| critical items that will make the biggest difference and | | | | leave the company or is transferred. |
| have the most value to you and your company. | | | | Business Downturn and Technology Clauses |
| 1. Most carriers will combine different offerings to | | | | While not always offered by the carrier, many |
| maximize overall volume and revenue. Today more | | | | businesses are now asking for business downturn and |
| than ever, carriers are fighting to be your one-stop | | | | technology provisions. |
| shopping for a variety of telecom services. The fact | | | | For example: A business downturn provision would |
| that they CAN offer you every telecom service, | | | | allow a customer to renegotiate the agreement if the |
| doesn't mean you should follow their advice. Handle | | | | company cannot meet its minimum commitment |
| one at a time, then see how the overall package can | | | | levels due to unforeseen changes in the business |
| be put together for your benefit and maximum | | | | itself (i.e. bad economy, layoffs, etc.). Usually a carrier |
| savings for your company. | | | | will renegotiate a lower commitment level in |
| 2. All telecom contracts will require a minimum volume | | | | exchange for a longer term commitment. |
| commitment. This commitment is usually in terms of | | | | The Technology Clause protects a customer if they |
| pre-discounted revenue per month. Variations could | | | | decide to change services to more advanced |
| include annual usage, net revenue amounts or total | | | | technology, resulting in lowered usage levels on initial |
| minutes of usage. Determine your level of | | | | services. An example of this is a company moving |
| commitment based on previous months or years. Be | | | | from a private line network to a frame relay or |
| aware that there are often additional | | | | virtual private network. |
| sub-commitments included for specific service | | | | Successful telecom negotiation can mean a huge |
| elements. FACT: The more volume you offer the | | | | difference in your company's "bottom line" telecom |
| carrier, the better rates you'll be able to negotiate. | | | | expenditures. Plan your strategy. Familiarize yourself |
| 3. All require a minimum term commitment. | | | | with the basics, and always remember: Everything is |
| Two or three year terms are most common, but | | | | Negotiable! |