If you buy managed services, here's a partial list of additional charges that may apply even though they are virtually never listed in the RFP response:
* Out-of-Band modems and POTS lines to enable monitoring and management of managed hardware;
* Additional migration or transition charges per device to bring the client hardware under management, build the asset management dbase, etc;
* Quoted MACD (moves, adds, changes, deletions) pricing that excludes the cost of the truck roll and ancillary cabling;
* Additional costs for Lifecycle Management/Account and Service Delivery teams, particularly for large enterprise customers;
* Additional charges for "enhanced" SLAs for maximum time to repair and "dedicated management servers" in the supplier's network operations centers.
And here’s a list for MPLS transport non-recurring charges that you will not hear about until you are billed for them:
* Port Change Charges
* CIR/CoS Change Charges
* Port Diversity Activation Charges
* POP Diversity Activation Charges
* CoS Activation Charges
* CoS Deactivation Charges
* Per Port Cancellation Charges
* Per Port Expedite Charges
* Charges for changing a provisioning date
There are lots of other examples. One is site surveys for wireless LANs. The WLANs are part of the deal but the site surveys, which the carrier requires, are not -- although they are available for a "slight" extra cost. Another is "cheaper" international TDM local access that provides no uptime coverage or assurance outside of normal business hours.
Several tactics are related to this play. One is to price specified initial sites reasonably, but require any additional sites to be "custom priced" and set those prices higher than the price for comparable locations in the original agreement. Another is to dangle offers of scope, presence/coverage, or capabilities the carrier doesn't really have, highlighting the exclusions or additional costs only as the client becomes more committed and deadlines approach.
Keep the customer from going to market with preemptive renewal offers
The "sweet spot" in terms of customer leverage is usually around a year before a deal expires--earlier is too far away, and as you get later the customer's ability to actually move traffic/networks without disruption or a dreaded fire drill begins to erode. At the same time, customers who are legitimately "in play" in a down market draw aggressive offers like ants to a picnic. So it's no surprise that about a year before a major network deal ends, the incumbent will show up with a speech about how the carrier wants to "do something" to help the customer in these tough times, so it’s offering a "really aggressive" offer that will produce savings now--not 12 months from now. As part of the pitch (or a month later, if the customer doesn't bite the first time) the carrier will throw in a "signing" or "loyalty" bonus in the form of a one-time credit that will effectively lower the customer's costs in the current fiscal year.
The catch, of course, is that the preemptive offer isn't really very good--it's usually 15-20% above "market" in a world where non-hated incumbents can get away with 5-10% over market in competitive situations (because of the cost and hassle of migrating). The carriers get away with this because the improved pricing they are offering is pegged to giving the customer a modest reduction in what it is paying now, not a good price compared to the market.
And that free loyalty bonus is actually very expensive--our estimate based on hundreds of deals is that the carrier typically prices to get three times the bonus back over the life of the deal.
