Telecoms Contract Renewal

Challenge

Our client needed to ensure that its incumbent telecoms supplier’s proposed charges for a three-year extension were competitive.

Our client had been in an outsourced telecoms services contract with the same supplier for 5+years and intended to renew services with the incumbent for 3-5 years and therefore required assurance that the proposed charges were competitive

Peru reviewed proposed charges service by service to provide a key input into which choices the client could make moving forward, e.g. how to exploit SD-WAN versus traditional MPLS

Solution

Reviewed client’s requirements and current invoices to gain a detailed understanding of the scope, volumes and service levels of the new services

Peru liaised with client stakeholders to understand the context of the extension; history with the supplier, coverage of asset charges, commercial and service models

Peru’s database of outsourced contract pricing was mined to provide similar contract data to form a peer group for comparison of each of the services

All charges were adjusted to deliver a like-for-like comparison and calculate a fair market price range

Major variances were analysed and discussed with the client

Outcome

Significant value in building the business case

Our analysis provided significant value to the client in building its business case for the extension
Peru pinpointed areas where proposed charges were competitive. This allowed the client to focus its negotiations on the services that benchmarked as expensive
Peru’s review of the provider’s pricing highlighted the key drivers for further negotiation with the supplier. e.g. fibre to the cabinet (FTTC), IP telephony
Peru’s support allowed the client to answer questions from internal stakeholders on the competitiveness of the proposed charges and to enter commercial negotiations in an informed position