With carrier prices for voice and data services dropping, now is the time for corporate network managers to get tough at the bargaining table to save millions of dollars on multiyear contracts.
By insisting on lower rates, avoiding added fees and considering bids from second-tier carriers, companies can lower their network service costs drastically, analysts advised users at the Communications Managers Association annual conference here last week.
Users should be seeking rates of less than 4 cents per minute for typical interstate calling and perhaps as low as 2 cents per minute within a year, analysts said. A year ago, that rate was typically 6 cents per minute.
"Network managers aren't doing enough of this negotiating," said David Bowers, a consultant at InTelesystems Inc in Dallas. "If you don't ask up front [during a contract negotiation], you don't get it."
Telecommunications attorney James Blaszak, a partner at Levine, Blaszak, Block & Boothby in Washington, said the "vast majority" of companies are neglecting the negotiating process at great cost. "The major carriers are forcing things down the throats of their customers that people don't know about," Blaszak said.
For example, he said companies shouldn't automatically agree to pay Universal Service Fund fees, which can increase the total contract cost by as much as 4.5 per cent. "If the long-distance carriers say the government made them charge this, throw them out of negotiations, because they were not forced to do this," Blaszak said.
At conference sessions on the topic, several network managers acknowledged that they haven't been aggressive negotiators but said they plan to get tougher next time around.
"In the past when I tried putting the carrier's feet to the fire, they didn't budge much," said John Glaser, manager of telecommunications at Data_scope, a medical products supplier. But after considering Bowers' comments and the competitive climate, Glaser said, "We'll try harder."
Glaser said he liked Bowers' idea of hiring a smaller carrier for a specific niche, such as toll-free service. "Although the smaller ones do have questionable reliability," Glaser said.
For long-distance voice and data services, Bowers said Qwest Communications, Frontier and Cable and Wireless should be considered just as reliable as the traditional Big Three of AT&T, Sprint and MCI WorldCom.
"The smaller guys want your business so bad that they'll make amazing offers," Bowers said.