SPECIAL EDITION • THE NEXT NORMAL
8 Tips and Tricks for Saving on Telecommunication-related Costs By Christian Ericson, BITS
A
s the banking industry begins to recover from the Covid-19 pandemic and interest rates remain low, many community financial institutions will look for ways to reduce their operational expenses. Your telecommunications-related expenses for voice, Internet, and data circuits are likely to be a large part of your overall budget, and banks may be paying 20-30% more than they should be in telecom costs. As a service provider working almost exclusively with community banks for telecommunications services for the past 16 years, BITS has acquired some tricks and tips to help your financial institution reduce unnecessary expenses regarding telecom contracts.
1
Your bank won’t realize the maximum savings available unless you are putting your services out to bid. When you only work with one telecom carrier, you don’t get competing offers or realize
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• July-August 2021
the extent of options available to your locations. While you may find a decent price on Internet service from your current carrier, a number of other transport options, such as private fiber may be a better fit for your branch locations. Getting quotes from multiple carriers on a variety of options will ensure that your bank is getting the right service at the best price.
2
Align contracts for your telecom-related services: You won’t have leverage when negotiating for better pricing unless you line up contract dates for as many current telecom contracts as you can. Try and make sure that all of your contracts for POTS lines, PRI, WAN (Wide Area Network), and Internet circuits have aligned expiration dates.
3
Use the same carrier or aggregator for all telecom services. Managing multiple carriers and service providers can be confusing and difficult. Some carriers may fall
short on being able to provide telecom services to certain areas where you may have branch locations, but aggregators can typically provide service just about anywhere. By sticking with one carrier or aggregator for all telecom services, you will find the best pricing and an ideal alignment of contract expiration dates.
4
Stay away from auto-renewal. Auto-renewal clauses allow service providers to automatically continue your contract unless you specifically request cancellation in writing. This locks your financial intuition in for additional years at the end of a contract’s initial term. And often service providers require a 90-to-120day notice period for termination before the actual term end date. If you find yourself close to the end of a contract’s term, request to continue on a month-to-month basis without increasing your cost to “tariff” pricing, until you can renegotiate new contract
