6 Telecom Cost Reduction Strategies for Your Business

Scott Swearingen / Telecom / June 17, 2021

Telecom services are a significant expense for businesses everywhere. Some businesses simply pay their bill at the end of the month without much thought, while others do their best to minimize these costs.

Unfortunately, even when businesses think they are on top of their telecom cost management, they’re likely still leaving savings on the table. This is due to no fault of their own, but rather, it’s due to the complex nature of telecom billing and a lack of transparency within the industry.

Vendors don’t want customers asking too many questions and therefore tend to withhold their billing tactics from customers, making it difficult to access the information they need in order to find savings in this cost category.

In this article, we will explore some key ways you can start to reduce your telecom costs, which in many cases, does involve seeking the help of telecom billing experts as you navigate these methods of cost savings.

Overview of Telecom Expenses

For our purposes, telecom expenses can be defined as any cost related to the use of telecommunication services and equipment. Every business has different needs, but telecom expenses typically include internet and data services, wired and mobile phone services, and other communication technologies or IT infrastructure.

On the surface, this cost category might seem pretty straightforward, but with complex vendor contracts, billing tactics that are difficult to understand, and hidden fees, it is an extremely challenging expense to manage. Without knowing any better, businesses everywhere are overpaying for telecom services for these reasons.

How Much Do Telecom Services Cost?

Telecom costs can vary wildly from business to business. A small mom-and-pop type business may only spend $200-$300/month on their phone and internet systems, while others may spend tens of millions per month.

On average businesses spend 3-4% of their budget on IT and telecom services. Reducing these expenses can have a serious impact on a business’s bottom line.

6 Ways to Reduce Telecom Expenses

1. Check Your Customer Service Records

Many customers don’t even know customer service records (CSR) exist, but they are an important resource to look at when trying to find savings on telecom services. These detailed reports contain how your rates are calculated, what telecom services you use, and what rates your business is charged at.

Though any business can request these reports, they are extremely difficult to understand due to the fact that they are written in an industry-specific, computer-generated code. In most cases, it takes the eye of an expert trained in this industry to understand these customer service records.

If you do decide to work with someone to help you understand your CSR, they’ll help you look for:

  • Above-average rates on long-distance calls: By comparing your rates with other industry benchmarks, you can notice if you’re getting overcharged for long-distance calls.
  • Misapplied taxes and fees: With many regulations governing how you are charged for your services, there are bound to be errors and invalid charges.
  • Unused lines and telecom features: If you use a high volume of telecom services, it’s common to have lines that you’re being charged for even if you’re not using them. You may also be subject to paying for features like call waiting or call forwarding on lines that don’t need it.

2. Review Your Telecom Vendor’s Tariffs

Telecom vendors are required to outline tariffs that determine the amount they are able to charge for their services. The tariffs essentially serve as an agreement between the telecom company, the public, and the government. Since these pricing guidelines are in writing, it’s a good idea to check that you are actually being charged according to the vendor’s tariffs.

Though these tariffs can be difficult to find or access, a trained professional would be able to assist you. In the research process, you and an expert may uncover that a vendor isn’t following their own guidelines, and in other cases, certain tariffs may be misapplied.

3. Review Your Telecom Services Contract

Believe it or not, it’s common for telecom vendors to disregard the billing agreements that are in their own contracts. Sometimes these discrepancies are simple human errors, while other times, they are blatantly keeping customers in the dark about potential discounts and savings.

For example:

A customer may be entitled to a certain discount, but if they aren’t aware of it or can’t find it within the contract, the vendor won’t apply the discount.

Other times, a vendor may promise to apply a discount down the line, but the customer doesn’t follow up and the vendor doesn’t apply the discount.

By reviewing your contract, you could potentially spot and correct the discrepancies above.

4. Look For Valid Disputes

Outlined within a vendor’s terms and conditions are details about how far back you can be reimbursed for potential errors, overcharges, and misapplied taxes. You can also find out what types of credits you can receive based on these disputes.

Sometimes vendors will try to handle disputes by giving the customer a three-to-six month credit instead of what the customer actually deserves to be paid. Without knowing any better or looking at the terms and conditions, customers just take the vendors at face value and accept the less than sufficient credits. In some cases, the customer is entitled to getting a refund all the way back to the point of error. We have seen this yield six-figure refunds for clients.

Understanding a vendor’s terms and conditions is another area where it would make sense to work with an expert. The language in these documents is often complex, lengthy, and takes a trained eye to fully comprehend how to get you the credits you deserve.

5. Correct Make Up Charges

The best way to understand “make up” charges is by way of example.

Let’s say hidden within your contract there is a MARC (minimum annual revenue commitment) that you must maintain and your business ends up spending less than this amount. In this case, the amount of underpayment would have to be billed as a “make up” charge. Without realizing it, your business will pay a large additional fee that could potentially be corrected if you know what to look for.

Though “make up” charges are valid fees, they are often applied incorrectly or used in a dishonest way.

6. Bundle Your Services Together

One of the easier ways to minimize telecom expenses is to bundle your services and consolidate them under one telecom vendor. Though in some cases you have less flexibility with bundled services, the reduced pricing can be a great fit for small to mid-sized businesses with less comprehensive telecom needs.

When you work with a single telecom vendor, it also reduces administrative effort when consolidating bills, invoices, and payments. These time savings for your team ultimately plays into the overall cost reduction for your telecom spending.

How P3 Cost Analysts Can Help

As we’ve seen through this exploration of the ways to reduce telecom costs, seeking the help of a trained telecom industry expert is a big help when finding savings in this cost category. When customers try to find these savings themselves, they often struggle to access and understand the documents outlined in the above sections, leading them to miss out on a variety of potential savings.

At P3 Cost Analysts, we have a full team of telecom industry experts that specialize in helping customers work through a comprehensive audit of their invoices, contracts, customer service records, terms and conditions, and vendor tariffs. Not only do our experts know how to find these documents, but with their years of experience, they can actually understand them in a way that leads to savings.

On top of working through a comprehensive audit of your telecom services, we provide ongoing monitoring of your invoices to make sure that you are continually receiving the savings you deserve. We also make sure that your vendor is following any agreements or new contracts that we helped implement. Additionally, with our access to the most up-to-date industry pricing information, we make sure that your costs are at or below industry standards.

Reduce Your Telecom Costs Today

If you are a large business or organization with a high volume of telecom services, the only way you can effectively save on these costs is to hire someone in-house that has a tremendous amount of experience in the industry or to outsource to professionals.

If you are interested in having us take a look at your telecom services invoices and contracts to achieve better rates, reach out to us on our website by filling out our contact form, or calling 1-877-843-7579, and we will put you in touch with one of our local franchisees.

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