Top 10 telecom contract mistakes

09.02.2011
When it comes to telecom negotiations, most telecom managers have a difficult time. I see far too many contracts riddled with unacceptable clauses and limitations, shackling companies with sub-par terms and conditions, bloated pricing, and even obsolete technology.

This isn't really the telecom manager's fault. Like many of us, most came up through the ranks of engineering, architecture, and design -- none of which provides optimal training for carrier contract negotiations. And frankly, there's no great way to learn how to negotiate contracts -- other than by trial and error. In the interests of learning from others' errors, then, herewith a "top 10" list of the most common telecom negotiations mistakes.

No. 1: No "out" clauses. The single most powerful clause in a telecom contract is the "termination without penalty" clause, invocable in a range of situations, which gives companies leverage when making requests from carriers.

No. 2. No business flexibility. What if your organization merges with another, or divests part of its business? Your contract should flex to accommodate changes in business.

No. 3: Overly granular minimum-annual-revenue commitments (MARC). Why is it any of the telco's business how much you spend on vs. wireline, or voice vs. data? If you have to have a MARC (and they're decreasingly required, see No.4), it shouldn't stipulate how you spend money with a carrier -- just how much.