The situation
A large U.S. financial institution was renewing a $28M network and telecom agreement covering circuits, managed network services and voice across its branch footprint.
Telecom agreements at this scale are rarely reviewed line by line. Branch networks accumulate circuits through acquisitions, relocations and closures, and the billed inventory drifts from the operating inventory over time. The renewal was priced against the billed inventory.
What we found
Deal IQ's telecom practice lead ran this engagement. Telecom is granular work. Pricing varies by carrier, by region, by contract vintage and by volume commitment, and the savings sit in the detail of the rate structure and the circuit inventory rather than in a headline discount.
Two things came out of the review. The rate structure sat above what comparable footprints were paying, and the billed circuit inventory included services the bank was no longer using.
The result
- Latest vendor quote
- $27.9M
- Final negotiated price
- $16.7M
- Reduction against quote
- 40%
- Savings
- $11.2M
No change of carrier. No disruption to branch connectivity.
Takeaways
- Telecom pricing is even less transparent than software, and can be negotiated down significantly
- Billed inventory had drifted from operating inventory
- No service disruption
Frequently asked questions
Is telecom negotiable in the same way software is?
Yes, and telecom rewards the detail. Deal IQ runs telecom cost optimization as a dedicated practice, with a practice lead and a track record in the category, because pricing carries its own dynamics and billed inventory tends to drift from what the business actually runs.
Do we have to switch carriers to reduce telecom costs?
Not necessarily. The largest savings usually sit in rate structure and billed inventory, and both can be reviewed with the carrier in place.
What is usually the largest source of telecom savings?
Rate structure and inventory accuracy, in that order. Deal IQ reviews both, and unlike a software renewal a telecom review does not have to wait for a contract date. It can start whenever you want to look at the cost.
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