AT&T customers currently face several challenges when negotiating renewals and when transitioning from legacy TDM environments. With regard to renewals, AT&T account teams are currently heavily incentivized to replace discounted revenue. In other words, any discount offered on a contract renewal must include a provision to purchase new services that offset the savings. For example, we observed a situation where a customer was offered a $1.5 million discount by the end of the year; however, the offer included a stipulation that, in order to receive the discount, the customer would have to provide orders for new services worth at least $1.5 million over the same period. Variations from this off-set require a higher level of approval within AT&T’s sales and contract management hierarchy.
We’ve also observed some instances where the revenue replacement strategy is accompanied by inconsistent account team service, significantly out-of-market pricing and a lack of stewardship of existing services. Customers can find this especially frustrating when attempting to extend or renew their existing AT&T contracts
AT&T’s approach to retiring legacy TDM platforms and transitioning customers to VoIP and SIP also presents a challenge. While AT&T’s commitment to IP platforms and to the future is laudable, and while IP alternatives are being aggressively priced to attract customers, prices on legacy services are steadily increasing, with monthly charges rising on what appears to be a quarterly basis. Moreover, much-needed assistance in moving customers away from legacy services is notably inconsistent, especially at the local account team level. In some cases, it appears AT&T may be missing an opportunity to build customer relationships by easing the transition to IP, relying instead on a strategy of forcing the move by pricing customers out of the TDM market.
To address these challenges, customers should, during renewal negotiations, insist that discounts not come with a corresponding price tag. If need be, they should state their willingness to diversify and utilize alternative providers. With numerous options available in the open market, AT&T should get the message. With regard to VoIP/SIP migration, the best strategy is to be informed. Many customers lack understanding of their TDM environments and don’t have a clear vision of how to transition seamlessly. Armed with insight into their environment, customers can embrace VoIP/SIP and approach transition as a proactive, value-adding initiative, rather than a risky and uncertain endeavor.
Most customers consistently expand their network services portfolio. This gives carriers an opportunity to win more business by being competitive on pricing and terms. AT&T shouldn’t be in a position to stand above the competitive fray, but a well thought-out and highly leveraged negotiation strategy is critical to achieving your financial and contractual objectives
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