The six clauses you should always add to your telecoms contract

It goes without saying that you should read every new telecoms contract carefully and completely before you sign on the dotted line. If there’s something in there that you don’t like, you can ask to have it removed. And if there’s a crucial element missing, you should have plenty of time to negotiate with the vendor to have it added.

But that doesn’t mean you have to go out and get a law degree in order to do your job properly – you just need to be aware of what you need and what you definitely don’t need from each of your vendor relationships.

Too many TEM professionals miss the opportunity to tweak their vendor contracts in order to get a better deal and a better service, and this is often due to the fact that telecoms contracts are usually written by the providers themselves, to suit their own purposes.

As the purchaser, you are actually in a very strong position to negotiate on most of these terms, especially if you are spending a lot of money with them. By taking the time to read through and update your contracts, you can end up with a substantially better deal, and a more efficient TEM department.

Never assume that the telecoms contract you have been shown is a set standard agreement. There is always room to negotiate a better deal – you just have to know what to ask for.

Here are the six key clauses which are frequently overlooked in telecoms contracts, but which will save you a lot of time, money and hassle further down the line.

1. Protection against chronic outages

A chronic outage refers to an on-going problem with circuit outages that is defined on your terms. Usually, a ‘chronic’ outage problem is defined as three outages within your circuits within a finite period of time (e.g. one year; six months). When three outages have been reported, you should have the right to terminate the telecoms contract quickly and easily.

Of course, in order to prove that the three outages took place, you need to be able to record them in as much detail as possible for example:

•         When did they take place?
•         Which circuit was involved?
•         How long did the outage last?

Define these parameters from the outset, and make sure that you have software in place, which can accurately keep track of any and all outage information.

If your service isn’t performing, you should be able to simply walk away from the contract without any ramifications.

2. Options to migrate spend

If you no longer require a circuit, you should be able to migrate that spend and use it elsewhere, so that you are not wasting money on unused lines.

However, you should note that it is perfectly reasonable for the supplier to ask that you pay a connection fee or another non-recurring fee associated with installation for the new circuit. Agree this ahead of time to avoid unexpected charges.

3. Longer timeframe for SLA breaches

The Service Level Agreement (SLA) is there to protect you, the purchaser. However, most vendor contracts will include a clause, which restricts the time by which you notify the supplier. This is is often limited to around 30 days from the date of the breach.

Ideally, this timeframe should be extended to at least three months, or even six months, so that you have enough time to register the breach, gather the relevant data and pass it on to the vendor.

4. Benchmarking requirements

You should always have the ability to benchmark all of your services and prices against industry norms. However, it is important that an independent data provider such as TeleGeography measures these norms.

Make sure that your vendor is prepared to match prices and services in line with the market at large, and request a benchmarking review at regular intervals throughout your contract.

5. Technology migration options

From time to time you may find that you are using a technology which is nearing the end of its life or which is no longer useful to your business. In this case, your vendor should offer you the ability to migrate to a new technology without incurring any termination costs, as long as long as you stay with the same provider and to sign up to a new service term for those services.

6. No automated renewals

A lot of suppliers will include an auto-renewal clause as standard in their contracts, which allows them to automatically continue with your contract unless they have specifically been told otherwise. There is sometimes even a long notice period of 90–120 days, after which time your contract auto-renews and you miss out on the chance to renegotiate, or terminate.

When you sign up to a contract with a supplier, make sure you reduce this notice period by as much as possible, or remove any auto-renewal clause altogether. Alternatively, you could ask for the term of service to go month-to-month at the end of the contract year, giving you even more time to review the service and think about what you want.

Temforce – Category Management SaaS enabling teams to manage their Telecom, IT Categories and Suppliers through 1 easy to use application.