Renegotiating mobile services and telecommunications contracts can yield reliable connectivity at a substantial savings for your organization. Want tips from professionals? Tangoe’s team of 60 cost-management consultants and 12 contract negotiation artists offer these practical tips to help you successfully negotiate telecom and mobile contracts, navigating renewal processes to satisfy company needs while reducing costs.
In this article, you’ll get four easy ways to save on mobile plans, knowing how to decide between pooled and unlimited plans. You’ll also learn five best practices for telecom negotiation with tips on how to get started with baselines and benchmarking.
Getting Started: Cost Benchmarking and Market Price Indexes
The first step in renegotiating your telecom and mobile carrier contracts is to audit your existing telecom services and mobile devices, creating a baseline of your current assets and their costs. Then benchmark your existing service and contract rates against industry-standard pricing from leading providers. This requires staying informed about market trends, pricing structures, and competitive offerings in the telecommunications and mobile service sector.
Don’t rely on the telecom carriers and mobile service providers to help you here.
This is typically where you need to ask the advice of Telecom Expense Management experts who monitor billions of dollars in IT spending and technology services to stay on top of changing markets and pricing trends. They can review contracts, amendments, invoices, and other data at their disposal to assess the difference between what you’re paying today and what you could be paying with market-leading plans and prices. Their job is to help ensure you’re getting highly competitive rates and the best contract terms.
This is where Tangoe’s IT cost management consultants can help. For instance, here’s Tangoe’s IT spending trends report, which offers our insights into how mobile and telecom prices are trending now. Here’s what one client said about Tangoe Advisory Services:
“It was hard to justify moving to a new [telecom] service because of the agreements that we had in place and the potential disruption to the business, but Tangoe’s price benchmarking intelligence proved to us that we were paying too much.” Read the full story.
Mobile Contract Negotiations: Pooled vs. Unlimited Plans
Start by negotiating both pooled and unlimited mobile service plans for smartphone devices.
Beware! Unlimited mobile plans may be easy and seem hassle-free, however they can lead to overspending and higher costs. If you do choose pooled plans, stay on top of consumption volume or service usage, but don’t be too worried about slight overages as those will likely cost you less than paying for a lot of unused data.
And, don’t forget to thoroughly review your contract from a financial and legal standpoint to identify any restrictions that you feel may impact operations or anticipated savings.
Remember, IoT devices or machine-to-machine devices are not typically included in mobile contracts. Most of the time they are operated by different lines of business with separate contracts, so make sure to factor in any such costs individually.
4 Easy Ways to Save On Mobile Plans
- First, check for unused phones and seldom-used features as those costs can be significant.
- Next, ensure your data pools or services match your usage, and you don’t have significant overage or underutilization.
- With international travelling back in full swing, look to work out the best international service package you can get with calling and roaming options.
- Finally, think about your global programs wherever possible because international contract negotiations can result in significant savings over addressing the U.S. carriers alone.
Five Best Practices for Telecom Service Contract Negotiation
- Strike at the Right Time: The best time to negotiate contracts is well before your agreement expires. Prices tend to increase upon contract end dates, but even if you’re paying the same rate month to month, your strongest negotiating power comes well before your agreement expires, so be mindful of expiration dates.
- Know Your Needs: Collaborate with line-of-business managers to make sure you’re aligned on the inventory of phones and devices, service usage and data needs. With today’s rapidly pace of change, most procurement leaders find that their telecom and mobile services are grossly misaligned with business needs, thereby offering a significant source of savings.
- Upgrade and Consolidate Your Services:
Look for legacy services (POTS lines, PRIs, BRIs) in your inventory that have been or will soon be decommissioned and replaced with new cloud-based communications services. This way, you don’t pay for services you no longer use or need. Tangoe finds that companies can frequently save +20% on POTS or PSTN services.
If you still need legacy services, look for other alternative options as cost savings come from modern technologies helping companies switch from Capex to Opex models and leverage the benefits of low-maintenance, agile technologies.
- Gain Some Leverage: Consider bidding out your contracts at the right time with ample competitors weighing in to maximize your options. Compare the rates and services of multiple vendors to gain negotiating leverage. Armed with market knowledge, you can challenge your current provider to match or surpass the offerings of their competitors.
- Prioritize Flexibility: And lastly, try to keep your telecom contracts as flexible as possible because less commitment allows you to adopt new technologies and changing market demands faster and easier than being locked into long-term contracts.
Effective negotiation is a continuous process, and regular contract reviews are essential to keep pace with changing technology and market dynamics. As procurement professionals, Tangoe understand the significance of renegotiating contracts to drive cost savings and obtain favorable terms. Learn more about how Advisory Services can help you get started with a free cost savings assessment.