A recent study found that European broadband users were only able to access 75 percent of the broadband speed they were promised. Differences between advertised and actual download speeds were smaller with cable (86.5 percent of advertised headline download speed) and FTTx (83 percent) than it was with DSL (63.3 percent).
In addition, actual download speeds in Europe are higher than in the US; with DSL services averaging 8.27 Mbps in Europe and 7.67 Mbps in the US; while cable services averaged 66.57 Mbps in Europe compared to 25.48 Mbps in the US. (FTTx services reached an average of 53.09 Mbps in the EU and 41.35 Mbps in the US.)
While these findings relate primarily to consumers, they are also important to enterprises. The information highlights fundamentals that managers of telecom expenses for all enterprises need to remember. First, it is important to review the contracts and what was promised by carriers, and capture metrics on what is delivered. Service Level Agreements (SLAs) should include penalties if carriers are not providing the network services at the promised speeds.
In addition, broadband prices in the EU countries fell by about 12 percent between 2012 and 2015. In most cases, EU countries are less expensive than the US for broadband above 12 Mbps. South Korea and Japan are even less expensive than the EU28 for broadband above 30 Mbps.
Second, the findings above illustrate how broadband prices are falling everywhere. This has been true for a long time, but enterprises often fail to negotiate contracts with clauses that allow for yearly rate reviews, as well as contract expirations with competitive bids and complete renegotiation every three years. These two items will help ensure that companies receive lower rates when prices drop.
Enterprises need to continually review their environment following the steps below to ensure they are getting the best deals.
- Verify that the enterprise is receiving what was contracted.
- If speeds or quality of services fall short, ask for a refund, credit or additional services. Ideally the contract should contain provisions for this, but it is still possible to receive compensation even if they don’t.
- Review the enterprise roadmap to identify short-term and long-term needs for telecom voice, data and IT.
- Analyze carrier offerings and alternates that can be used for leverage during renegotiations.
- Provide this information to the sourcing team to prepare them for all contract renegotiations.
- After the new contract has been negotiated, verify that the new prices are implemented properly on invoices.