It is estimated that the majority of mid-size to large corporations are spending from 10% to 35% more than they need to on recurring telecom carrier expenses. How can you tell if this is true of your company? Here are some key questions. If you answer “No” to any of these, you would benefit from taking action.
- Have you recently (within the last year) negotiated a new contract with your primary Interexchange Carrier (IXC)?
- Do you have Regional Bell Operating Company (RBOC) local service contracts in place?
- Is your telecom ordering process centralized?
- Do you have an up-to-date database inventory of all your lines and services?
IXC Rates
Over the last year, rates for Voice and WAN services have declined significantly. In the case of Voice, rates of $0.018 to $0.02 per minute for call originating or terminating via dedicated access are available from the Big Three IXCs and the RBOCs. Second-tier carriers are going as low as $0.015 per minute. Switched access rates of $0.03 to $0.035 are available from most carriers.
RBOC Contracts
Over the last couple of years the RBOCs have been offering region-wide contracts with a single revenue commitment. They are offering more aggressive pricing to fend off the IXCs incursions into local services. It is unclear how the merger of SBC and AT&T and Verizon and MCI will affect local service contracts, but it is clear that fully leveraging region-wide spend with a carrier can help keep costs down.
Conclusions
It takes a well-defined and –managed set of processes and tools, and ongoing vigilance, to keep telecom costs under control. Up-to-date market knowledge, well-negotiated contracts, and the choice of the right services are also essential. Whether you dedicate internal staff or engage outside resources for these vital functions, your investment will be returned many times over.
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