Buying Business Telecom Services Is Broken: Why and What’s Next?

Most companies don’t understand their purchasing processes as well as they think do, according to CIO. That’s certainly true of buying business telecom services. For decades, telecom providers have made the process of buying business services so time-consuming and complicated that we forget that what they sell is a simple commodity: the ability to transmit bits across a wire.

How did it get this way, and how do we get beyond it? The story of why buying telecom services became such a broken process goes back more than a century. However, a new customer-centric approach promises to replace it, making it far easier to find, purchase, and manage telecom services for your business.

How Buying Telecom Services Became Such a Nightmare

The telecommunication services and IT industries suffer from massive information asymmetry. Over time—especially the last 10 to 30 years—that’s tipped power in favor of telecom providers over customers.

Here’s how it happened.

1. Decades of Mergers and Acquisitions Made Finding and Bidding on Telecom Services Way Too Complicated

The IT and telecommunication industries consist largely of legacy companies that go back as far as the 19th century. These providers have squared off in intense competition that continues today. Just look at Sprint’s merger with T-Mobile, which concluded Sprint’s 120-year history.

While providers were aggressive on the mergers and acquisitions (M&A) front, they were also laying cable—tons of it—around the world, especially over the last 30 years. Today, “there is enough fiber optic cable under the oceans to circle the earth 22 times, with the longest cable spanning 24,000 miles.” More is being installed, too, such as Google’s 3,000-mile transatlantic Grace Hopper cable.

Map of undersea telecommunications cables. (Image source: Business Insider) The problem is, all that aggressive M&A activity and long, complex construction timelines made it difficult for telecommunication companies to keep quality records of all that cable. Outside of major metro buildings and important data centers, many telecom carriers don’t have as good a handle on where their cables are located as you might think.

So, what does this mean for buying business telecom services? It can mean weeks or even months of work just to find and bid on services in your area. Instead of being able to enter your address to find telecom providers, you have to spend days making calls and sending emails. On top of that, it means enduring delays, like when site surveys and wire locator tools disagree about where your fiber-optic line is.

This tangled, inefficient process for buying business telecom services is more than a headache. Negotiatus reports that, according to SourceToday data, inefficient purchasing like this costs business more than 6,500 hours per year, adding up to more than $170,000 in needless expenses.

2. Many Telecom Providers Have Resisted Pricing Their Services as Commodities

Given the competition in business telecom, it might not seem surprising that providers hide their pricing. But, ultimately, as mentioned earlier, telecom services are a commodity. As such, there should be an easy, algorithmic way to price telecom services and to find benchmarks such as what a 100MB dedicated internet access (DIA) circuit costs.

Yet by not pricing telecom services as commodities, providers force long buying cycles. That helps providers discover who each customer is and then adjust pricing accordingly. For instance, a 100MB DIA circuit may cost a provider the same in two different parts of the country, or even the same city. Still, many providers present customers different quotes, even if there’s no construction required. In fact, three businesses with the same needs in the same building will likely get different quotes.

These artificially long buying cycles are why you’ll probably wait 1–2 weeks for a price quote, followed by a slow-moving contract negotiation. After that, expect a 60 to 90-day installation that likely won’t go as planned. Installers may miss appointments, or something will go wrong that pushes the timeline out.

To avoid all that friction, some businesses turn to telecom agents. But that approach has issues, too. For instance, the agent might push you toward the provider that gives them the highest commission instead of the one best for your business. Of the 50+ network engineers and IT heads we surveyed, only one spoke positively of working with an agent.

3. Construction Makes Telecom a Slow-moving Industry

Telecom carriers help businesses move fast. However, building telecom infrastructure is anything but fast. Burying fiber-optic cable and copper wire is expensive, time-consuming work. That’s why it’s best to bury a lot of it at once, like, enough to support needs decades from now, and then let it sit as dark fiber until it’s needed. Then there’s more work to do above ground, from building radio towers to installing last-mile hardware.

Image source: Wikimedia Commons

Constructing telecommunications networks is a long and expensive process, requiring work both above and below ground.

All of this requires heavy up-front capital expenditure and navigating lots of regulations. Remember Google Fiber? Costs and lack of infrastructure partnerships contributed to the internet service’s struggles. Not to mention, constructing networks is delicate, error-prone work.

So is maintaining them. Ongoing maintenance is required to keep telecommunications lines working for decades. And with many providers not having super-accurate network records, that makes maintenance move all the more slowly.

The Solution: A Customer-centric Approach to Buying Telecom Services

The traditional approach of finding and buying telecom services has tipped power in favor of service providers over customers. It’s time to fix that. At Lightyear, we believe a customer-centric strategy is the best solution, one that’s optimized for your buying journey.

So, we built a solution that:

• Makes discovering telecom providers easy and free

• Shows you transparent pricing up front, no matter how complex your needs

• Streamlines your installation and your contract management

Best of all, this process benefits both sides. Because customers can find the best telecom solution quickly, service providers can close deals faster. That speed, combined with automated contract management, sets customers up for a positive experience—and happy customers buy more from their service providers.

Here’s how the Lightyear platform works.

1. Discover Telecom Service Providers Based on Your Address and Needs

What if you could shop for telecom services as easily as booking travel on Kayak or comparing loans on LendingTree? And what if you could fully configure the exact service complexity you need up front, such as five data racks for a colocation center with wave circuits?

A customer-centric approach to buying telecom services helps you discover options based not just on your business address but also on configurations. So if you need a 10GB DIA connection, you’ll only see provider recommendations that can deliver it. Need to design an entire software-defined wide area network (SD-WAN)? Do that, too, in a matter of minutes.

2. Compare Quotes with Up-front Pricing and Specs

For price quotes to be actionable, they need to be transparent. That’s why all quotes on Lightyear’s platform include discounts baked into your custom configuration. If you need static IP addresses or BGP routing, that pricing is reflected at the beginning, not as something that surprises you later.

The Lightyear dashboard visualizes your results so you can compare IT and telecom services quickly and easily. Not to mention, we’ll find prices faster and present a more exhaustive range of options than any telecom agent or internet service provider.

And if you ever feel unsure about your telecom needs or which option best meets them, no problem. Our network experts can even make objective recommendations that meet your business needs while staying within your budget.

3. Get Expert Help Implementing and Managing Your Telecom Services

Lightyear project manages the implementation of your telecom services, too. Installation is a delicate process, and delays are common. We keep service providers accountable to their timelines, track the work that’s getting done, and inform you of need-to-know details such as handoffs or unplanned delays.

Once your telecom services are installed and implemented, the Lightyear platform continues to save you time and money by visualizing and automating your contract management. Imagine you have 50 circuits with an average of three due for renewal each month. We’ll send you reminders several months prior to renewal so you can decide to re-up or re-shop.

In addition to receiving renewal notifications, you’ll also be able to see contract terms and rebate processes. And if billing or maintenance issues arise, we can help. That level of support helps you manage your telecom services and infrastructure at a glance, just like the world’s best IT departments do.

Automate How You Buy Business Telecom Services, and Manage Your Contracts with Lightyear

Lightyear accelerates the process of discovering and buying telecom services. With it, you can build and maintain the network your business needs in a fraction of the time compared with the friction-filled, decades-old approach of yesterday. Learn more at Lightyear.ai.