Terms and conditions in telecommunications contracts can catch some of the most sophisticated procurement teams at enterprises. When sourcing or negotiating a contract for telecom services, procurement managers focus on getting the best rate for telecom services. Telecom rates are only part of what determines the ultimate price and cost for telecom services. Knowledge of how language in the contract and the terms and conditions is critical to getting the best deal. Often, enterprises don’t realize that language in the contract can also be negotiated, and a lawyer that doesn’t know what they should look for will provide a high level review of the terms and conditions.
One example of something to change is language that addresses business downturns. Most carrier contracts allow for a brief adjustment of one two six months for Minimum Annual Revenue Commitments (MARCs). In addition, organizations may find their financial performance prevent them from being excused from MARC requirements. With the recent downturn, many firms have made cuts to staff. These staff reductions inevitably lead to reduced consumption of telecom services.
Organizations should also consider the impact of new technology on MARCs. A change to VoIP, mobile services or other technology may lead to reduced consumption of some services and increases in other categories. It is important to anticipate these changes. Where possible, managers should use technology ramp-up and ramp-down clauses to avoid MARC penalties and get the best prices.
Finally, organizations should try to avoid attempts by telecom carriers to limit the time in which they can submit claims for billing errors. Carriers will attempt to scare enterprises into accepting short periods of time for claims with claims that this also limits their ability to submit bills for services that were under-billed. Telecom service providers rarely bill customers for less than what the tariff, contract or special rates allow. Most prices for technology and telecom services are declining. Carriers quickly implement new price increases.
Carriers have a variety of terms and conditions. Some items can be negotiated and some items may not be able to be negotiated. Some items will have a significant impact on the ultimate cost for services and others items are less important. This is why it is critical to have an expert that regularly negotiates telecom contracts. Learn how Avotus Intelli-Sourcing can save you money and avoid neglecting critical aspects of terms and conditions.
Tagged: Terms and Conditions, Telecom Contracts, sourcing, negotiating a contract for telecom services, Telecom rates, MARCs, Minimum Annual Revenue Commitments, Avotus Intelli-Sourcing