Telecom rate increases are coming – what to do?

As the old joke goes, “Economic experts have accurately predicted 9 out of the last 5 recessions!.” In that same vein, it doesn’t take much of an expert to predict that Telecom carriers will continue to increase fees and pricing. A recent Wall Street Journal article indicated that, for several carriers, there has been a saturation point and price wars were a thing of the past. In fact, recent price increases by Verizon are just the first of others that are likely to follow.

So, the real question is what can enterprise customers do to address this issue and protect themselves?

Here’s some suggestions based on our experience:

1.     NEGOTIATE NOW:   It is never too early to negotiate or renegotiate existing agreements. It is a commonly held fallacy that you must wait until shortly before the end of a contract Term to look at renegotiation. Not true. We do it for clients all the time. Negotiate now to lock-in (and possibly even lower) rates before any further increases are introduced. In addition, ensure that all rates are fixed for the Term i.e. not a percentage off of an ever increasing tariff rate.

2.     LEVERAGE TOTAL SPENDING: Most carriers like to segregate spending volumes (e.g. Wireline vs. Wireless) when it comes to defining “qualified spend” relative to any spending commitments. While there used to be a real internal division between the wireline and wireless sides of the carriers, this is no longer the case yet carriers still tend not to give full credit for all spending when determining which services contribute toward fulfilling revenue commitments.

3.     CUSTOMIZE & OPTIMIZE WIRELESS: While many enterprise customers are already pooling their wireless users, most  simply assign users to the standard published carrier rate plans and then try to minimize overages. They don’t realize (and carriers certainly won’t tell them) that rate plans can be customized and created to allow better optimization of spending based on the actual usage patterns and profiles of the user base. Of course, this takes some in-depth analysis to determine the users’ unique requirements but, again, we do it all the time with some impressive results. A useful analysis will take into account the number and type of voice minutes, data usage, Domestic vs. International use, type and locations of International Roaming, International LD etc..  In addition, any analysis or negotiation should address hardware costs including exemptions for upgrades, lost phones, ETF waivers and retention credits/incentives.

The bottom line is that, while telecom rate/cost increases are as inevitable and regular as a morning commuter train, there are effective steps that can be taken to avoid being victims of unplanned for costs. The key is to not just wait for things to happen but to, instead, take action now.  As Will Rogers once said, “Even if you’re on the right track, you’ll get run over if you just sit there!”

Source: Rick Sigel 

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