Media Center

Media Center

Year End Review and Predictions for 2008

  • No Jitter (www.nojitter.com)
  • 1/16/2008
  • Hank Levine and Jim Blaszak

We believe that average enterprise customers did not do as well in telecom procurements in 2007 as in previous years. Our assessment is based on our observation of carrier conduct in procurements and regulatory decisions. And 2008 only promises to further separate smart, tough customers from 'the pack'.Growing concentration in the telecom industry made significant rate reductions for enterprise customers harder to come by in 2007. Rates certainly moved down, but our sense is that it "took more" for enterprise customers to win significant price concessions. Enterprise customers often fail to use a genuinely competitive procurement process - they 'negotiate' with their incumbent carrier, who promises market rates and then delivers reductions that do not in fact meet the market and are accompanied by a variety of 'take backs' and restrictions. As the industry gets more concentrated, the gap between deals like this and well done, competitive deals will only grow. The rates of customers who take this route will fall further behind market leading rates, and carriers will be successful in clawing back contractual concessions made years - sometimes decades -- before.

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