Conducting telecom talks

Don’t give all your business to a single provider, even if it’s convenient. The name of the game is to keep your options open. Particularly in light of mergers between the former incumbent local exchange carriers and interexchange carriers, it’s wise to nurture relationships with cable companies and alternative carriers, which can often provide alternatives for local access.

In the telecom marketplace, it seems as though the only constant is change. Given the mergers, acquisitions and steady drumbeat of emerging technologies and trends, nothing stays the same for long. Last year’s frame relay service has morphed into MPLS. Last year’s voice VPN is changing into VoIP. And last year’s carrier has a new name, a new logo – and possibly a new sales rep.

One thing that hasn’t changed, though, is the core set of principles and guidelines for negotiating effective contracts. As I mentioned last week, the best tool IT executives have for managing all this change is a negotiation strategy that increases your leverage over providers.

What does that mean? For starters, plan to renegotiate your contracts every three years or so – with the right to change carriers. Yes, it’s disruptive. It’s also the best way to ensure your service stays top-tier.

Start the negotiation process by issuing matrix RFPs (which ask carriers to bid on a range of services across a range of geographies). Reach out to the broadest group of players possible – when in doubt, include them. You’ll winnow out the group to a shortlist pretty quickly.

Even if you don’t think you’re interested, ask the providers to bid on next-generation technologies such as MPLS and VoIP. Why? Providers are promoting the shift to MPLS and VoIP aggressively, because, as I’ve noted in several of my columns, it’s good for them. That means prices might be better than you think.

Engage your procurement and legal teams early, and keep them involved in process from the get-go. You’ll need their help in crafting service-level agreements, escalation clauses and technology refresh clauses with teeth – meaning that if the service providers fail to deliver, you can leave the contract without penalty.

I realize the last thing an overworked telecom manager wants to do is change providers, particularly as the result of an early termination. The threat of switching doesn’t sound like a very effective club to use with carriers, but keep in mind that the folks who’ve done it say changing service providers is almost always much easier and less painful than they’d feared. Most of the time, you won’t have to go that far – by simply invoking your right-to-leave contract, you’ll generally get the attention and focus on fixing your issues that you’ve wanted all along. Of course, this is only true if you’ve actually got those clauses in place – which is why it’s so important to build them in.

Finally, your strategy should include awarding your business to multiple players – don’t give all your business to a single provider, even if it’s convenient. The name of the game is to keep your options open. Particularly in light of mergers between the former incumbent local exchange carriers and interexchange carriers, it’s wise to nurture relationships with cable companies and alternative carriers, which can often provide alternatives for local access.