Telecoms Contracting Best Practices: Success Clauses Help Avoid Fallout From Provider Spin-Offs, Sell-Off, Market Exit

Enterprise telecoms market consolidation can disrupt your service delivery if your service provider is acquired by a competitor. Other disruptions that might have a negative impact on the quality of service delivery and/or account management by your provider of choice include your provider’s decision to spin off or sell assets and business operations that support services you depend on, or if they opt to exit a local market entirely – offering you just 60 days (and sometimes less) for you to make alternative arrangements.

If you don’t have a succession clause in your telecoms contracts today, consider adding one the next time you renew or sign a new contract for network and telecoms services, even if the service provider in question is not providing essential connectivity or other services. If you depend heavily on a single provider for supporting most of your network and telecoms service needs – such as local access, long-distance and international voice, and your data WAN – take the time at the earliest opportunity to discuss your options with your provider’s account team, with the aim of amending an in-progress contract. This should be done if you have more than 12 months remaining on a contract term, or if you have a revenue commitment that is less than 75% met. A clearly spelled out succession clause contributes to a successful commercial relationship between customer and service provider.

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