Is It Time to Renegotiate Your Telecom and Mobile Service Contracts?

Renegotiating mobile services and telecommunications contracts can provide your organization with reliable connectivity and significant savings. Seeking expert advice? Vatic's team of telecom expense management consultants and contract negotiation specialists offer practical tips to help you successfully navigate telecom and mobile contract renewals, ensuring your company’s needs are met while reducing costs.

In this article, you'll discover four simple strategies to save on mobile plans, including how to choose between pooled and unlimited options. You'll gain insights into five best practices for telecom negotiations, complete with tips on establishing baselines and benchmarking. 

Getting Started: Cost Benchmarking and Market Price Indexes 

The initial step in renegotiating your telecom and mobile carrier contracts involves auditing your current telecom services and mobile devices to establish a baseline of your assets and their costs. Next, compare your existing service and contract rates to industry-standard pricing from top providers. This process requires staying informed about market trends, pricing models, and competitive offers within the telecommunications and mobile service sectors. You can't rely solely on your telecom carrier and mobile service providers.

This is where you should seek the expertise of Telecom Expense Management professionals. These experts monitor billions of dollars in IT spending and technology services, staying alongside market shifts and pricing trends. They can analyze contracts, amendments, invoices, and other relevant data to determine the potential savings between your current expenditures and what you could achieve with market-leading plans and prices. Their mission is to ensure you receive the most competitive rates and the best contractual terms available. This is where Vatic’s IT cost management consultants can help. 

Mobile Contract Negotiations: Pooled vs. Unlimited Plans 

You should begin by negotiating both pooled and unlimited mobile service plans for smartphones.  While unlimited mobile plans may appear convenient, they can often result in overspending. These plans give the illusion of freedom with no data limits, but the costs can add up quickly, especially if you're not fully utilizing what you're paying for. If you opt for pooled plans instead, it's crucial to monitor your data usage closely. Pooled plans allow multiple lines to share a set amount of data, which can be more cost-effective. Minor overages will likely cost less than paying for a significant amount of unused data each month, so don't stress over small excesses. By keeping a closer eye on your data consumption, you can make more informed decisions and potentially save money in the long run.

Remember to thoroughly review your contract from both financial and legal perspectives to identify any restrictions that could impact your operations or expected savings.

Keep in mind that IoT and machine-to-machine devices are not typically covered under standard mobile contracts. Often, they are managed by different business units with separate agreements. Therefore, be sure to account for these costs individually.

4 Simple Strategies to Save on Mobile Plans

1. Start by identifying and eliminating unused phones and rarely-used features, as these can incur significant costs.
2. Ensure your data pools or services align with your actual usage to avoid substantial overage or underutilization.
3. With international travel resuming, seek the best international service package, including calling and roaming options.
4. Finally, consider global programs whenever possible, as international contract negotiations can yield significant savings compared to focusing solely on U.S. carriers.

Five Best Practices for Telecom Service Contract Negotiation 

• Negotiate at the Optimal Time: The ideal moment to renegotiate contracts is well before they expire. Prices often rise as the contract end dates approaches, and even if your rates remain stable month to month, your strongest negotiating leverage is found well before the expiration date. Always keep track of when your agreements are due to end.
• Know Your Needs: Collaborate with line-of-business managers to ensure alignment on phone and device inventory, service usage, and data requirements. In today's fast-paced environment, many procurement leaders discover that their telecom and mobile services are significantly misaligned with business needs, presenting a substantial opportunity for cost savings.
• Upgrade and Consolidate Your Services: Identify any legacy services (POTS lines, PRIs, BRIs) in your inventory that have been or will soon be decommissioned and replaced with new cloud-based communication solutions. This ensures you avoid paying for obsolete or unnecessary services. Vatic's analysis shows that companies can often save over 20% on POTS or PSTN services. If you still require legacy services, consider alternative options. Modern technologies offer cost savings by transitioning from Capex to Opex models, leveraging low-maintenance and agile solutions.
• Gain Some Leverage: To maximize your options, consider bidding out your contracts at the optimal time with a sufficient number of competitors. Compare rates and services from multiple vendors to enhance your negotiating leverage. Equipped with market insights, you can challenge your current provider to match or exceed the offerings of their competitors.
• Emphasize Flexibility: Finally, aim to keep your telecom contracts as flexible as possible. Lower commitment levels enable you to swiftly and easily adopt new technologies and respond to changing market demands, rather than being constrained by long-term agreements.

Effective negotiation is an ongoing process, and regular contract reviews are crucial to keeping up with evolving technology and market dynamics. At Vatic Outsourcing, we understand the importance of renegotiating contracts to drive cost savings and secure favorable terms for procurement professionals. Reach out to us to learn how our telecom consulting can help your organization.